Weekly technical Analysis for week ended 19th May 2012.
nifty during the week was one of a weak market. It opened on a weak note and there after tried to conquer 4900 moved near 4950 and thereafter tanked on the weight of the international weakness. The way the market cracked indicates an extreme weakness in the market. The market has failed to move above the 200 day EMA twice and then started to fall very fast and when it fell it broke through many support levels. even the psychological level of 5000 level did not offer any support and market fell through the 5000 level like knife through butter. The way it pierced through 5000 it appears that bears are coming into the market in a big way and would make all attempts to take the markets down. I have also told in my earlier updates that any movement below the 200 day EMA bears would find upper hand. Nifty failed to move above the 200 day EMA which is clearly an indication that bulls doesn’t have strength to support the market and long term investor have failed to support them market which is a very bearish signal. i have been telling from last two to three months that above 200 day EMA bulls rule the market and below it bears. So as its below it all the up moves would be sold into so its better to be short in the market than long. Nifty is below all the major moving averages and the distance between the EMA is increasing which is indicating that bears are having strong hand and market would attempt to go down. So be prepared for this.
it has been observed that over the last one and half years from November 2010 onwards all down wards movements went below the previous low and we have to see whether this time also market would make an new low. If so we can see the market moving below December low which happens to be below 4550 levels. se we are still 350 points away from it. Will it go below 200 day EMA only time would tell. So have patience if you want to enter into market by buying shares. Still there is no divergence appears in the charts/oscillators which is giving an indication that market might reverse. It appears from the charts that all the positive days are only on the basis of short covering rather that genuine buying.
It can be seen from the above chart that we have formed a heads and shoulders pattern over a period of nearly two years which generally very strong and it can be seen from the above chart that nifty broke below the neck line in the month of august 2011 and moved towards 4500 and then again moved up touched the neck line and started to fall down it’s a perfect technical set up and generally the second fall after the touch of the neck line would be more dangerous and also achieves the targets and the target for the same would be the length of the head which is around 1300 points and the break of the neck line is at 5400 so we can expect a fall of 1300 points from 5400 giving a target of atleast 4100 which is nearly 800 points away will it go there we have to wait and watch.
I am not giving Elliott wave analysis as my technical software having some problem as all the wave counts are written in there I am not able to update the same here. but it appears that market is exactly moving as anticipated. So next week I would update on EW.
M. Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, May 20th 16.18 IST
nifty during the week was one of a weak market. It opened on a weak note and there after tried to conquer 4900 moved near 4950 and thereafter tanked on the weight of the international weakness. The way the market cracked indicates an extreme weakness in the market. The market has failed to move above the 200 day EMA twice and then started to fall very fast and when it fell it broke through many support levels. even the psychological level of 5000 level did not offer any support and market fell through the 5000 level like knife through butter. The way it pierced through 5000 it appears that bears are coming into the market in a big way and would make all attempts to take the markets down. I have also told in my earlier updates that any movement below the 200 day EMA bears would find upper hand. Nifty failed to move above the 200 day EMA which is clearly an indication that bulls doesn’t have strength to support the market and long term investor have failed to support them market which is a very bearish signal. i have been telling from last two to three months that above 200 day EMA bulls rule the market and below it bears. So as its below it all the up moves would be sold into so its better to be short in the market than long. Nifty is below all the major moving averages and the distance between the EMA is increasing which is indicating that bears are having strong hand and market would attempt to go down. So be prepared for this.
it has been observed that over the last one and half years from November 2010 onwards all down wards movements went below the previous low and we have to see whether this time also market would make an new low. If so we can see the market moving below December low which happens to be below 4550 levels. se we are still 350 points away from it. Will it go below 200 day EMA only time would tell. So have patience if you want to enter into market by buying shares. Still there is no divergence appears in the charts/oscillators which is giving an indication that market might reverse. It appears from the charts that all the positive days are only on the basis of short covering rather that genuine buying.
It can be seen from the above chart that we have formed a heads and shoulders pattern over a period of nearly two years which generally very strong and it can be seen from the above chart that nifty broke below the neck line in the month of august 2011 and moved towards 4500 and then again moved up touched the neck line and started to fall down it’s a perfect technical set up and generally the second fall after the touch of the neck line would be more dangerous and also achieves the targets and the target for the same would be the length of the head which is around 1300 points and the break of the neck line is at 5400 so we can expect a fall of 1300 points from 5400 giving a target of atleast 4100 which is nearly 800 points away will it go there we have to wait and watch.
I am not giving Elliott wave analysis as my technical software having some problem as all the wave counts are written in there I am not able to update the same here. but it appears that market is exactly moving as anticipated. So next week I would update on EW.
M. Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, May 20th 16.18 IST
