Nifty Weekly Technical Update

Weekly technical Analysis for week ended 27th November 2011.
Nifty this week opened on a week note and continued to moved down and closed at 4700 levels. One of the noticing features of the current weeks movement is that nifty has moved below 4700 and made a new 52 week lows thus giving an indication that bulls are successful taking market lower. Till now 4700 was offering support for nearly three months time and this week it was conquered by bears which is clearly indicating that further down sides are not ruled out. Another important thing which has happened during the current week is that nifty has moved below the low of 2010(previous year) this even has occurred only once before in the last one decade, 2008 was the only year when nifty has moved below the previous years lows and in that instance it has fallen by around 30% from those levels and if this time also it falls to that extent then we have chances nifty going below 3500 levels. So will it go there only time would tell the same? We have to wait for weekly close below the previous year’s low of 4675 would confirm that we are in for a bigger trouble for bulls. Another important technical event which has taken during the week is that nifty has moved below the 200 week EMA this has happened for the third time in last three months. In august it closed below 200 week EMA but in October twice it found support at that level and not in November it broke with ease the 200 week EMA which clearly indicates that now it would becomes a formidable resistance. Now nifty should move above the 200 week EMA in the coming weeks otherwise bulls would have tough time in coming months. 200 week EMA is at 4855 so this is the level which we should keep an eye. Nifty has been moving between 200 day EMA and 200 week EMA for last four months and this time the floor was opened giving an indication that bears would be dominating the market in coming time. Technically we are entering into a very crucial level we are entering into the gap up opening levels of may 2009 post election results and any move below that level would result in market just collapsing vertically in which case bulls would be decimated. So any move below 4400-4500 has all chances of market collapsing very violently. So keep a close watch on those levels as we may have a good buying pressure at those levels if those bought at those levels would not support the market then we can have a serious trouble for bulls. Technically it appears that the coming new years is going to be good for bears.
Positive for the market:
• Daily stochastic is in buy mode indicating that we might see a short up move.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily and weekly MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

From so many weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.
The updated wave structure is now being given. This structure has to be negated if 5453 is violated and I have to work out the new structure. As of now it appears that we have completed fourth wave of the third for the fifth wave and we are in completion of the firth wave of the third wave of the fifth after completion of that we might see market raising up and there after we might start fifth of the fifth wave of the expanding triangle and this would have to be more violent in case of expanding triangle
M. Sri Mahidar
Trend is Friend.
Sunday, November 27th 21.32 IST

Weekly technical Analysis for week ended 18th November 2011.
The movement of nifty has negated any of the bullish sentiment which bulls have tried to bring and also lot of analysts have started to term it as new bull move. But the Elliott wave and price movement has been clearly indicating that the bulls market has not yet started. Bear market ends when there are so many bears around and at the present time it seems still bears are faaaar away as at every rise the bulls come and say that bull market might have started. Bull market would only when the market rises and all the people would say that the rise is temporary and market would fall after that. So we have to simply wait for the moment for the bull market to come. Elliott wave is clearly indicating that the wave structure has still not completed and we are still far away from the bottom. i have not see times where when interest rates and inflation are raising and market has also kept raising, generally market is inversely related to inflation and interest. As currently interest and inflation are rising continually we can expect market to make new lows. So be prepared for it. Now we come to the market. In the current week bulls were running for cover and it appears the bears have come with a bang. This week market moved below all the important moving averages and now it is below all major moving averages. One of the noticing features is that this week is that nifty once again has found resistance at 200 week EMA and fell from there and that too very violently. This is the second time that nifty has found resistance at 200 day EMA firstly it happened in July 2011 and secondly it was this time. Previously in July market has fallen 20% and we have to see whether this time also the market falls at-least this time also till now we have fallen only 7-8% only so we have at-least another 12% fall in the market. So we have to use all the rises either for liquidating our positions or going shorts. So bulls be care full.

It can be seen from the chart indicated by black arrow that MACD has just give sell signal and the gap between average and trigger line is increasing and if MACD has to come all the way down the we can expect the market to go down from current levels after brief consolidation. So be prepared for a fall. Till the nifty is below 200 day EMA we have all the chances of moving down further.
Another important event which is happening is that nifty is once again at 200 week EMA. Last two times in august and October it has found support at that 200 week EMA and then reversed towards 5300 levels, this is the third time in last three/four months that nifty is finding itself at the same point. As this is the third time it has all chances of breaking it. But we have to wait and see. Once nifty breaks the 200 week EMA the fall might become very prolonged and also very violently down ward so once 200 week EMA is taken out on weekly basis bears can rejoice. 200 week EMA is at 4856. So this level is to be closely watched.
Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• Weekly MACD is in buy mode
• Daily MACD is about to give buy signal.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
This week I am not giving any Elliott wave update as there is not much which has happened in last 10 days. This time I would be giving the indication of the broader market and what its indicating for them for mid-caps and micro caps. One of the noticing features is the all the indices have formed a heads and shoulders pattern and they has broken though the neck line and the minimum target is yet to be achieved. So it is clearly giving an indicating the carnage in the market is still going to continue before any respite for the markets. As you are aware that and also in have indicted in my earlier updates that nifty has formed H&S pattern and neck line was broken in august and we have target of around 4200 for that which is still to be achieved. Now see the same pattern in other indices which are given below

It can be seen from the above that all the indices including nifty are mimicking, and all the indices are 15% away from the minimum target so we can expect indices falling at-least 15% from current levels. One of the noticing features of the 15% level is that if the indices achieve the minimum target then the indices would be at the may 2009 levels(post election result) gap opening level and any move below it we can see a vertical fall in the market to the march 2009 levels so now we are entering into crucial levels for the market and bears would try to take wind away from the bulls. So we are in for some very eventful months in our market and also world markets.
M. Sri Mahidar
Trend is Friend.
Sunday, November 19th 22.00 IST

Weekly technical Analysis for week ended 5th November 2011.
Nifty during the week was in a very tight range of 130 points and in the coming week or weeks we can see the range expanding and market moving in that direction in a long way. On the noticing features is that nifty is finding resistance at 200 day EMA and finding support at 100 day EMA so its struggle between these two. So we have to see in which direction the break out happens. 200 day EMA offering resistance is good news for bulls and 100 day EMA offering support is good news for bulls, so it clearly indicating that the market is undecided and we have to patiently wait for market to break any of these levels. Market failing to go past 200 day EMA is good news as historically below 200 day EMA bears are active and long term investors are active above 200 day EMA. So as long as it is below 200 day EMA bears would be active. Actually this week nothing has happened in the market as to give a detailed analysis.
The heads and shoulders pattern indicated three months back is still intact and till the neck line is violated we have all chances of nifty moving down towards the intended target of 4200 in coming months we have to see whether the same would be violated or not. Now we are nearing the neck line which is nearly 200 points away. Now we have to see whether the same is violated or not.

the H&S pattern is clearly depicted in the above chart. it appears to be forming a perfectly H&S pattern. And if it materializes we can get an excellent shoring opportunity at around neck line. The neck line is of nearly two years trend line so its going to offer a good amount of resistance in the upside movement of nifty. If nifty closes above it on weekly basis then we can see nifty moving up substantially probably above 6000 levels. But as of now the probability appears to be break but we cannot rule out anything in the market.

Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• Nifty has moved above 50 day EMA,100 day EMA
• Weekly MACD has given a buy signal
• Daily MACD is in buy signal.
• Daily and weekly stochastic is in buy mode.
Negatives
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.

The updated wave structure is now being given. This structure has to be negated if 5453 is violated by nifty in the current move and I have to work out the new structure. As of now it appears that we are in completion of the fourth wave of the third wave of the third of the fifth and after the completion of the same we have all possible chances of nifty dropping down towards 4700 levels. As of not it appears that the fourth of the third of fifty is forming a flat and all the internal structure is perfectly falling in place but any move above 5453 would negate the pattern and I have to rework the pattern which would be done when the same happens.
M. Sri Mahidar
Trend is Friend.
Sunday, November 6th 19.26 IST

Nifty Weekly update

Weekly technical Analysis for week ended 29^th October 2011.

Bulls have not at-least able to conquer the 5200 successfully in this truncated week. Even though the week was a truncated week it was an eventful week. Nifty was able to move above 5200 on diwali day and on next trading day it was a huge gap up day way above the 5200 indicating that bulls were able to go past the resistance of bears offered at 5200 level. The movement above 5200 is a major victory for bulls and we can see further movement of market on upsides. One of the noticing features of the movement of nifty during the week is that nifty was able to successfully move above 100 day EMA and also on Friday it moved and closed above 200 day EMA. It’s a major achievement for the bulls and we have to see whether follow up buying takes or not. Nifty is now entering into huge resistance levels and it is expected to face huge resistance at every rise. Nifty has to move and close above 5450 then 5500 and then 5700 then only we can say that bulls were able to defeat bears. Any failure of nifty move past these levels would result in nifty falling towards 5200 again. Another area of strength for bulls is that they were able to take nifty above 100 week EMA which is major achievement for bulls and not this 100 week EMA would offer support for any downward movement of nifty. The 100 week EMA is at 5257 so any downward movement of nifty is expected to find support at those levels.

In the above chart it can be clearly seen that on weekly charts nifty has formed a higher high which has been preceded by higher low which is one of the powerful bullish signal, so now till a lower low is formed the trend would appears to be up. It can be seen in the above chart that nifty has broken below the H&S pattern (neckline) in August has moved down there after and now it has started to move up towards the neck line, we have to see whether the neck line would offer resistance or not. Generally when a H&S pattern is broken the price first moves down and then it moves up towards the neck line it moves slightly above the neck line and then collapses in the direction of the break out. So will the neck line offer resistance or not we have to see if nifty fails to move above the neck line it would form a perfect H&S pattern and we have all chances of market collapsing down ears towards 4700 levels again. One of the noticing features of the neck line is that it’s nearly as 2 year trend line and it would not be easy to break above it just in a flash. So nifty is expected to face huge resistance at around 5450-5500 levels (the point where the trend-line is present. Notice the volumes on the current rise the volumes have been constantly falling or reducing on each subsequent rise. Does that indicate strength of bulls. Its left to your imagination. You may be thinking that I am still a bear when everybody is gung ho above the up-move above 5200 level that too with a gap up, I only tell what the patterns are indicating irrespective of what other are saying. When all the negative patterns are negated then we can say that bulls have achieved success.

Positive for the market:

· Nifty has exactly taken support at 200 week EMA.

· nifty has just moved above 15 week EMA.

· Nifty has moved above 50 day EMA,100 day EMA and 200 day EMA.

· Weekly MACD has given a buy signal

· Daily MACD is in buy signal.

· Daily and weekly stochastic is in buy mode.

Negatives

· 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.

· weekly MACD is in sell mode,

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

· 15 week EMA is below 50 week and 100 week EMA.

I would be furnishing Elliott wave update next week as I am busy in some personal work.

M. Sri Mahidar

Trend is Friend.

Sunday, October 30^th 19.37 IST

Nifty Weekly

Weekly technical Analysis for week ended 15th October 2011.
This week nifty movement is indicating some strength and we cannot ignore the same. Whatever may be our technical interpretations, the market is showing strength and we have to believe it till it shows/indicates weakness. We have been discussing from so many weeks that nifty is stuck in range of 5200 to 4700 and every time when it goes near 4700 it bounces towards 5200 and whenever it moves nears 5200 it again falls to 4700. So I have been indicating that till this range is taken out we have to trade this range. This time it is again nearing 5200 and coming week we might see nifty attempting to cross 5200 we have to see whether the same would be conquered or selling pressure would emerge again or not. But this time it appears that we might see nifty moving above 5200. Elliott wave is clearly indicated when it took support at 4700 and the same appears to be coming true. The elliotte wave details would be given in the relevant section. One of the noticing feature of the current move is that nifty has bounced from the 200 week EMA which is a indication of strength of the bulls. I have indicated in my earlier updates that 200 day EMA is the last line of defense for the bulls and it appears that bulls were able to defend the territory. Bouncing from the 200 EMA is bullishness for the market. As nifty has bounced from the 200 day EMA the next resistance appears to be at 100 week EMA which happens to be at 5252. So this is the level which has to be watched. Nifty has been founding support at 200 week EMA and resistance at 100 week EMA for lat two and half months. So 100 week EMA is going to offer healthy resistance this time also. So as of instead of 5200, 5250 is going to be healthy resistance level. So this is the level to be watched for. Generally market goes above the resistance level, gives an impression that resistance is taken out and bullishness has come into the market and then market plunges we have to see whether this time also the same happens or not. If 100 week EMA is taken out it might find resistance at 50 week EMA. So we are entering in the territory of resistance levels. And the coming weeks are going to be testing time for the bulls and we might find resistance at each and every level. One of the noticing feature of the last weeks movement is that the volumes are less on the green candle days and more on the red candle days and during the last week each subsequent day the volumes were less than that of the previous days which would be concern for bulls. One of the noticing features is that weekly MACD is on the verge of giving buy signal which becomes a bullish signal we have to see whether the same would materialize or not.
The chart below is clearly indicating the resistance and support levels for the nifty. The double headed arrow is indicating the 200 week EMA and 100 week EMA on either sides and we can clearly see the resistance and support levels. And also not the two important things in that chart one is indicated by blue arrow is at 5200 which is the level which was taken out in august and that would offer resistance as of now. And if it is taken out then we have resistance at blue line indicated by red arrow. This is nearly two years resistance level and also neck line of the break down from the H&S pattern which break down has happened in august 2011. So till all these resistance levels are taken out bulls cannot be comfortable.
 

Positive for the market:
• Nifty has exactly taken support at 200 week EMA.
• nifty has just moved above 15 week EMA.
• Nifty has moved above 50 day EMA and is approaching 100 day EMA.
• Daily MACD is in buy signal.
• Daily and weekly stochastic is in buy mode.
Negatives
• Nifty is trading below 100 day and 200 Day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• weekly MACD is in sell mode,
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
 
Elliotte Wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.
It appears that we might have completed the third wave of the fifth wave and we might have just started the fourth wave up and which should move above 5200 to confirm the same, that is why I have said earlier that we might see nifty moving above 5200 giving a false break out and then collapsing. Once the fourth wave is completed we might start the fifth wave which should be devastating wave. Generally the fifth wave of the expanding triangle should be the most devastating and we might enter into the fifth of the firth in the coming weeks which would plunge the market to sub 4500 levels probably sub 4000 levels. So be prepared for the same.
Another alternative which can be derived as of now is that, we might still be completing the fourth of the third wave of the fifth wave. The fourth of the third wave of the fifth wave might be forming a flat and in which case market might start the fifth wave of the third of the fifth which has chances of taking nifty towards or below 4700 levels and after that once again nifty has all chances of attempting 5200 again and then plunge. So not the wave structure is becoming complicated so would give sleepless night for the Elliott wave analysts.

M.Sri Mahidar
Trend is Friend.
Saturday, October 15th 23.21 IST