Weekly technical Analysis for week ended 12^th September 2014

I am writing this weekly update after nearly one month’s time. Nothing has happened during last one month on nothing has happened as far as elliotte wave point of view. For the week nifty opened with gap up moved up slowly and then started to fall and ended up slightly up compared to last week. Nifty has been maintaining above 20 day EMA for last so many months from march onwards, in the mean time it has found support on it for two times and then move up, so till it maintains above 20 day EMA we can expect it to continue to move up slowly and steadily. 20 day EMA is at 8000 and 50 day EMA is at 7776 so these are the two levels to be closely watched as any correction in nifty is going to take support at these levels. if these are taken out then we can expect a healthy correction. But till that happens we can expect the market to move steadily upwards.

Till now in this uptrend, the retracement have been taking longer time than the rise, till this phenomenon is continued we can expect the market to make a steady up move. If that trend is reversed then we can expect the uptrend is over, till now it has not happened in last six months, once that happens the same can would be reported in our weekly update till that happens we can safely assume that uptrend is intact.

Elliott Wave Analysis:

I have been pointing out that nifty is moving in a corrective wave and we are in the up move in the corrective wave. The details working from the low of October 2008 is given in the following charts.

The above chart is from October 2008 to till date. As per my calculation we have completed wave –A which took 200 day from January 2008 to October 2008 and from there onwards we stated to form wave-B and we are still in formation of wave-B only. Wave-A of wave-B was from October 2009 to October 2010 and wave-B of wave-B is from October 2010 to Dec 2011 and we are in wave-C of wave-B from then onwards till date. We have completed wave-A and wave-B of larger wave-B and we are in formation of wave-C of wave-B from low of December 2011 onwards. Wave-C is splitting into its components and we have completed wave-1 and wave-2 and we are in formation of wave-3 of wave-C of larger wave-B. It is forming more complicated wave structure and now splitting into its components.

The details breakup of the wave-B is indicated by arrow in the above chart-1 is give below:

It can be seen that the wave-C of overall wave-B is given in the chart-2 above it can be seen that the wave-C is splitting into its components i.e. into 5 waves the 5 waves are being shown in blue colour in the above chart. It can be clearly seen that the wave-1 and wave -2 have completed and we are not in formation of wave-3 of wave-C of larger wave-B. It can also be seen in the above chart that wave-1,2,3,5 of wave-3 have completed and we seems to have started the wave-5 of wav-3 of wave-C of larger wave-B. The waves break up of wave-3 to 5 is given in the chart 3  below.

The break up of wave-3 is given in the above chart. It can be seen that we have completed wave-4 in July 2014 and we are still in completion of the same. It seems that we are in wave-5 of the wave-3 and it seems that we have completed wave-1 and 2 of wave-5 and we are in formation of wave-3 of wave-5. It appears that we might have completed wave-1 of wave-5 and we are forming wave-2 of wave-5 after which wave-3 would start so we can expect the market to move up on completion of wave-2 as per this we might not see nifty going below 8049 and maximum 7855( which is doubtful). So we can expect a slight sideways movement post which we can expect it to make an up move. The wave-1 was of length 468 points so if the wave-3 extends the we can expect it to be of length 758 points from the low of wave-1 which gives a target of 8619. Wave-3 would be generally be more that the wave-1 so it would be at-least 470 points means 8332. Once the wave-3 of higher wave-3 is completed we can expect the market to correct wave-4 and then the wave-5 would start post which market would culminate and we can start an down move which would be longer that the corrections which we have seen in recent 3-4 years. So it seems there is some time till the market tops and we have scope for up-move in the markets. This interpretation is as per now and as it changes or progress the relevant medications to the wave structure would be worked out and updated in our weekly updates.

M.Mahiidar

Enjoying Life

Trend is Friend.

September 14, 2014 6:18 PM