nifty weekly update

Weekly technical Analysis for week ended 22^nd April 2012.

The market has been one of the boring for the last few weeks as it has not moved anywhere. For around nine weeks nifty has been moving in the range of 5200 to 5650. As can be seen when market comes to such a close range then it becomes very boring and also it also gives an indication that we are about to get into a big trending market which may be either up or down. If we take the up move from January onwards the rise from 4550 to 5650 it took nearly eight weeks and not the corrective mode from 5650 to 5200 has taken around astounding eight weeks and the market has corrected only 50% of the rise in possibly equal time periods which is giving an indication the we might has the possibility to move up or a give a good up move rather that the violent down move. You may be wondering this guy till now bearish has suddenly started to give an bullish picture. I only give what the market say as I always say price is the king remaining all is second. The weekly chart is given a more good indication that that of the daily chart.  Nifty is finding support at the 100 day EMA, it has found support nearly three times in last one and half month which is a clear indication that bulls are in the market and they are expecting the market on the upside. As I have been saying in my previous updates also we are in an uptrend and the market is going to make an attempt to move up till its above the 100 day EMA and 200 day EMA. The 100 day EMA is at 5213 so till its above it on weekly basis then we have all chances of market moving up and it may also be noted is market is nifty is finding support at 100 week EMA and till its above it, it is a good sign for the market the 100 week EMA is at 5207 so till market is above it we can expect the market to move up. So considering all this it appears that 5200 happens to be very good and a healthy support for the market and if it is taken out on down side then we can expect the market to fall very violently but till its above it we have all the chances of market moving up only. So 5200 appears to be laxman rekha for the market. So till above it hope for the market to move up   

The weekly chart is given below you can clearly see that the market is in a corrective mode for the last two months and slowly drifting down and also notice the volumes are also very low which is indicating that the interest is slowly drifting down and we may suddenly see interest setting in indicated by the volumes and the market would move in a trending way and that too longer that the earlier one. So we have to wait for the volumes to increase and show us the direction.  

Positive for the market:

·         Nifty is above 200 day EMA

·         Market is above 200 week EMA.

·         50 day EMA has moved above 100 day EMA which is a bullish signal

·         Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.

·         Daily MACD has given a buy signal.

·         Daily stochastic oscillator is in buy mode but is at around overbought levels.

·         Weekly stochastic oscillator has give a buy signal

·         One of the big positive signal which has been generated is 50 week EMA has moved above 100 week EMA and also 15 week EMA has moved above all the three.

Negatives

·         Monthly MACD is in sell mode indicating weakness in the market.

Elliotte wave analysis: As there is nothing much change in the EW structure I am not giving the same I would give the updated structure in the coming week.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, April 22^nd 10.12 IST

Weekly technical Analysis for week ended 7^th April 2012.

I am writing this update after nearly three weeks of absence. First of all I would like to say sorry for that. As I was travelling extensively on weekends I was not in a position to update on the same. But have been following the market closely. Technically nothing major change has happened. Now we would come to the market. This has been the truncated week for the market so nothing much seems to have happened during the week. During the previous weeks the market has taken support exactly at 200 day EMA, nifty moved below the 200 day EMA and thereafter moved above it which is a clear sign that long only investors (long term investors) are staying in the market and as providing support to the market. Till market is above it we can safely assume that bulls are strong and all the down side moves are bought into and falls would be shorter and the rise would be faster and would be longer than that of fall. So technically we should see for buying opportunity rather that the reverse. There seems to be nothing much change in the elliotte wave structure which I would discuss at the relevant section. Technically both daily and weekly charts are showing strength and I may not be surprised if the market moves up surprising everybody. One of the positive thing about the current down move is that it is on low volumes and also the re-tracement has taken more time which is clearly indicating that bulls are supporting the market and at present they are not surrendering to the bears. So till the situation reverses we can expect a decent up move. Also the weekly MACD is in buy mode and also the Daily MACD has give a buy signal which is a clear signal we have all chances of marching upwards from here. it may also be noted that nifty has exactly taken support at the sloping trend line which it has broken in January 2012 it is indicated in the chart below. And also the weekly chart also is showing some bullish sentiment. There is convergence of EMAs,50,100 and 15 week EMA. So we can see market moving in one direction in a big way when EMA diverge and the movement would be in the direction of divergence of EMA. So we have to closely watch the same.

it can be seen from the above chart that nifty has taken exactly support at the sloping trend line(red color) drawn from the high of November 2010. The point of contact is indicated by the blue elliptical figure.

Positive for the market:

· Nifty is above 200 day EMA

· Market is above 200 week EMA.

· 50 day EMA has moved above 100 day EMA which is a bullish signal

· Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.

· Daily MACD has given a buy signal.

· Daily stochastic oscillator is in buy mode but is at around overbought levels.

· Weekly stochastic oscillator has give a buy signal

· One of the big positive signal which has been generated is 50 week EMA has moved above 100 week EMA and also 15 week EMA has moved above all the three.

Negatives

· Monthly MACD is in sell mode indicating weakness in the market.

it can be seen from the above that the positive signs are slowely coming So the market would surprise us? We have to wait and see.

Elliott wave analysis:

I have indicated few weeks back that we might be in formation of an expanding triangle as a second was of the “C” wave of a flat. And it seems that the 5^th wave of the expanding triangle still seems not to be over and we can expect it moving up again. It seems that the fourth wave of the 5^th wave of the triangle is complete and we might have started the 5^th wave which has chances of moving near the 5600 levels. so we have to see whether market responds accordingly or not. the updated elliotte wave structure is given below in the chart.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Saturday, April 7^th 11.27 IST