India VIX is pointing towards a very bearish picture for the market. After struggling to move above 25 for long time nearly five months it has moved above it and is not placed at 28. It has successfully moved above the resistance line indicating the strength of the bears and a clear picture that bulls are running for cover. You can see in the chart-1 above that it has broken above the resistance line. As per elliotte wave it appears that we might have compleated wave-2 and have just begun the wave-3 and generally wave-3 would be longest so we can see it moving further up and there by take the market down. So the obvious question would be to what levels would the VIX go? it has been given in the chart-2 indicated by an arrow, and it seems that we might see VIX moving towards 50 levels nearly double from current levels indicating that the market might make as good fall before any recovery comes. As wave-2 has take considerable time we might see wave-3 spliting into its components. So it appears as per VIX that bears would be having the last laugh atleast for the time being.

M.Sri Mahidar

Trend is friend.

Bank nifty update

Bank nifty is showing all signs of weakness. And it appears that it is on its way to a heavy down wards movement. It can be seen from the chart above that 50 day EMa has moved below 100 day EMA indicated by (eclipse) this has happend for the first time after april-may 2009 and the gap between then is increasing indicating that we might see further down sides. it can also be seen in the chart above indicated by blue square that bnf has moved above 200 day EMA and has found resistance at 100 day EMA and there after started to move down and once again moved below 200 day EMA indicating the buying support is not comming into the banks and this is clearly a warning sign for bulls and bears would be happy as they are seeing the bulls are not interested in buying as of now.
M.Sri Mahidar

Weekly technical Analysis for week ended 19th February 2011.
Nifty opened on a strong note and continued to move up throughout the week, except on Friday where in market reversed. The movement on Friday should be of a concern for the bulls as market has opened strong on Friday moved up and there after mid in the afternoon it just collapsed to close at virtually at a two day low indicating weakness of bulls. Last week I have indicated if the market moves on Monday we have chances of seeing the nifty moving towards 5600 to 5700 levels and you can see nifty has made a high of 5599 and from there it fell nearly 150 points to close at 5458. Last three days gain was surrendered to bears in just half a day signifying the strength of bears. Friday’s movement is one of the significant move and it would not be good for bulls you might be wondering what it is? Nifty has moved near the 200 day EMA and from there it reversed and fell very violently. It is indicating that bulls are not strong enough to take the market above 200 day EMA. Buying pressure is not coming into the market at 200 day EMA indicates extreme weakness for the market. Now we have to see how the follow through happens, if in the coming week also the selling continues then god can only save bulls. Another thing which can is clearly visible on charts is that the rise of the last week was on low volumes than that of the rise, which is clearly indicating that the more buying pressure is not coming into the market.

One significant event which has happened two weeks back which is shown in the above chart. It can be clearly seen that On Balance Volume (OBV) which is very strong indicators has also give a very bearish indicator. It can be seen from the chart above that OBV has been steadily moving up from April 2009 indicating that continues buying has taken the market up and the trend was intact. It can be seen in the chart that in January 2011 BOV has broken the trend line drawn from March 2009 and it was also associated with break of trend line of the price which is clearly indicating the buying has ended and selling is coming into the market. As OBV has broken the nearly 21 month trend line it is clearly indicating that bears have become active in the market and more selling is coming into the market which is clearly shown in the falling OBV. So till OBV turns up bulls would not have any hope.
Negatives for the market:
· Nifty has moved below 200 day EMA.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Monthly MACD has given a sell signal indicating extreme weakness in the market.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· The deadly cross of 50 day EMA moving blow 100 day EMA has happened which is clearly indicating extreme weakness.
· Daily stochastic oscillator is in sell mode.
Positives developing:
· Daily MACD has given a buy signal.
· Weekly Stochastic oscillator has just give a buy signal
Wolf Wave:

Last Month i have indicated that wolf wave has confirmed and we have a target of around 3500 and we have to see whether the same is achieved or not. Historically it has been seen that the success rate of wolf wave is very high around 85-90%, and virtually the targets are met after confirmation of the same. So we have to see whether the same is achieved or not.
Elliott wave Analysis:
I have indicated nearly at the end of December that if the alternative –II is correct then we have chances of seeing around 5300-5200. And see we nifty has made a low of 5177 and thereafter recovered very fast. Does that mean that we have formed a short term bottom? The answer seems to be “NO” as per Elliott wave it can be clearly seen in the above chart we might have completed the third of third and we might has just started to move up by way of wave four and there after wave-5 would start which would take the nifty below 5177 again towards 5000 levels. Last week I have indicated that wave-4 has all chances of taking nifty towards 5550 levels and there after wave-5 would start and take the market towards 5100 levels. Nifty has made a high of 5599 and there after started correction, which is giving an indication that wave-4 might have ended and we might have started wave-5 which can take the market down towards 5100 levels so we can see the market falling by nearly 300 points we have to wait and see whether that would unfold or not.

Pivot Point Analysis:
As per pivot point analysis, yearly Pivot is at 5716 and it is clearly gives an indication that nifty is blow the yearly pivot and which is a bearish indication and till it is below it, it has chances of moving towards s1 and s2. S1 is placed at 5093 and s2 is placed at 4053 so till nifty stays below the pivot of 5716 we can see nifty drifting towards 5093 and 4093. So now currently 5093 should offer support to the market so watch out for market to move to these levels. Nifty seems to have reached nearly 100 points away from 5093.
M.Sri Mahidar
Trend is Friend.
Sunday, February 20th 19.53 IST

IT Index

Has gold topped out. it appears to be so technically. it can be seen from the chart-i above which is of weekly time frame has broken the trend line from the low of 2008 i.e. nearly three years trend line. As the trend line is for long period the correction which started would be of longer time wise and price wise. You can also see in the second chart which is of daily chart it has formed a triangle and has broken down indicating that it might has topped out. the pattern is exactly similar to that formed in nifty in january 2008 where in nifty has broken down and you know what has happed there after. so we can expect a larget correction in gold probably towards 1000 levels. so be prepared for the same.

Nifty Weekly Update

Weekly technical Analysis for week ended 12th February 2011.
Nifty has opened on a weak note and has continued to slide throughout the week and recovered in the last half on Friday. One of the noticing features of this week’s movement is that nifty was making low each day including Friday and also closing at lower than the previous day except on Friday which moved above the previous days high indicating that bulls are trying to regain the lost ground. The closing on Friday in indicating some strength this has to be confirmed by nifty not moving below the Fridays low and also closing above the high of Friday. So we have to see whether the up move is only the short covering or genuine buying which is happening. So the Mondays close would somehow confirm the strength of the bulls at-least for the short term. So keep a close watch on Monday.
This week also market has been continuing to move away from 200 day EMA, this is the third continues week that the market is closing below 200 day EMA indicating extreme weakness and also indicating that long term funds are not supporting the market. So till 200 day EMA is taken over bulls cannot be sure of any recovery. Last week in have indicated that 50 day EMA has moved below 100 day EMA indicating extreme weakness and this week also 50 day EMA has further moved down below 100 day EMA clearly indicating that bears have come into the market and every rise would be met with heavy selling. This is the first time that market has moved blow 200 day EMA after long time, it might an effort to conquer 200 day EMA, and we have to see whether 200 day EMA would offer good amount of resistance or not, usually it would offer huge resistance. If the market moves up and 200 day EMA offers resistance then it would offer good shorting opportunity with stop loss at that price so be watch full of markets any attempt to conquer 200 day EMA.
Negatives for the market:
· Nifty has moved below 200 day EMA.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Monthly MACD has given a sell signal indicating extreme weakness in the market.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· Daily and weekly MACD is in sell mode indicating further weakness.
· Weekly stochastic oscillator is in sell mode and is moving down indicating that every rise would be sold into.
· The deadly cross of 50 day EMA moving blow 100 day EMA has happened which is clearly indicating extreme weakness.
Positives developing:
· Daily MACD is in oversold position and is trying to give buy signal.
· Daily and weekly stochastic oscillators as in extremely oversold positions. Daily stochastic oscillators has give a buy signal and weekly oscillator is about to give a buy signal giving an indication that market might make an attempt to move up, but weekly and monthly indicators are in sell mode every rises would be sold into so be careful of any recovery.

Wolf Wave:

Two weeks back i have indicated that wolf wave has confirmed and we have a target of around 3500 and we have to see whether the same is achieved or not. Historically it has been seen that the success rate of wolf wave is very high around 85-90%, and virtually the targets are met after confirmation of the same. So we have to see whether the same is achieved or not.
Elliott wave analysis:

I have indicated nearly at the end of December that if the alternative –II is correct then we have chances of seeing around 5300-5200. And see we nifty has made a low of 5177 and thereafter recovered very fast. Does that mean that we have formed a short term bottom? The answer seems to be “NO” as per Elliott wave it can be clearly seen in the above chart we might have completed the third of third and we might has just started to move up by way of wave four and there after wave-5 would start which would take the nifty below 5177 again towards 5000 levels. so not the obvious question is to what extent the wave-4 can move up it appears that it can move up to 5550 levels and in any case not above 5700. So wait and watch whether this one begins to form. If it doesn’t happen then I have to see for another alternative which I would give only when the above doesn’t happen.
Pivot Point Analysis:
As per pivot point analysis, yearly Pivot is at 5716 and it is clearly gives an indication that nifty is blow the yearly pivot and which is a bearish indication and till it is below it, it has chances of moving towards s1 and s2. S1 is placed at 5093 and s2 is placed at 4053 so till nifty stays below the pivot of 5716 we can see nifty drifting towards 5093 and 4093. So now currently 5093 should offer support to the market so watch out for market to move to these levels. Nifty seems to have reached nearly 100 points away from 5093
M.Sri Mahidar
Trend is Friend.
Sunday, February 13th 22.09 IST

Alternative-II

under this alternative, we are in completion of or has compleated 3rd wave and after that we might see up move of Wave-IV of wave-III and after that we might see wave-V of wave-III which would end the wave -III after which we might see a swift rise of wave-IV and then wave-V. so as per this we are near the end of the wave-III. we have to see for swift rise indicating that the down trend is over till that time the down move would sustain.

M.Sri Mahidar

Trend is Friend.

To day i would be giving the two alternatives.


Alternative -I

Under this alternative the details of the wave break up is given in the chart above. as per this we are still in the third wave of third wave and in that also we are in the third wave. As per this still we have some distance to go till it completes the wave and which has all possible chances of seeing 5000 or sub-5000 levels also. we have to see whether we are forming this alternative.

M.Sri Mahidar

Trend is Friend.

Weekly technical Analysis for week ended 5th February 2011.
Nifty this week has indicated indecisiveness except on Friday where in it has indicated and broke the good support at around 5400. During the entire week nifty was stuck between 5400 and 5550 and frustrated the traders or investors and on Friday suddenly from opening strongly to collapsing by the end of the day. The closing of the nifty on Friday was indicating extreme weakness. The close of nifty below 5400 is an extremely weak indication and it clearly indicates that bears have become strong in the market and further down ward movements are also not ruled out. the break of 5400 is a extremely weak sign. Currently we can expect nifty drifting towards 5200 levels.
Last week I have indicated that nifty has moved below 200 day EMA and this week also it stayed below it indicating the funds are not supporting the market and that also indicating the long term funds are just moving out of the market. One of the strong indicators of weakness is that this week it did not even make an attempt to conquer 200 day EMA which clearly is an indication that bulls are not interested in taking the market towards the EMA. The ease at which market broke below 200 day EMA is an indicating of extreme weakness in the market. So unless and other wise nifty makes an attempt to conquer the 200 day EMA bulls cannot hope any better days and all rises should be sold into. There are two important technical events that have taken place which are pointing towards extreme weakness. This week on monthly chart MACD has given a sell signal this is the first time after March 2009 that on monthly chart that MACD has given a sell signal. Another indicating is the deadly cross of 50 day EMA below 100 day EMA. Generally cross of 50 day EMA below 100 day EMA is considered at deadly cross as it is an indication of extreme weakness in the market or stock. This bearish cross has happened for the first time after april 2009 which is clearly indicating further weakness in the market and also bulls are active in the market and it would take hell lot of effort for the bulls to take control of the market. All these technicals are indicating that at present every rise has to be sold into and not buying to be done till the trend turns up and the same would be indicated by the market in the course of time and we can either be short on the market or just wait in the side lines.
Negatives for the market:
· Nifty has moved below 200 day EMA.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Monthly MACD has given a sell signal indicating extreme weakness in the market.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· It has closed above 50 day EMA indicating strength for the bulls.
· Daily and weekly MACD is in sell mode indicating further weakness.
· Weekly stochastic oscillator is in sell mode and is moving down indicating that every rise would be sold into.
· The deadly cross of 50 day EMA moving blow 100 day EMA has happened which is clearly indicating extreme weakness.
Wolf Wave: last week in have indicated that wolf wave has confirmed and we have a target of around 3500 and we have to see whether the same is achieved or not. Historically it has been seen that the success rate of wolf wave is very high around 85-90%, and virtually the targets are met after confirmation of the same. so we have to see whether the same is achieved or not.
Elliott wave analysis:

The option –II which I have given nearly one and half months has been proved correct and I have indicated that we can see 5200 if metarialises. And we are nearly 200 points from those levels. EW has clearly pointed the target when every thing else was not clear. Now we come to the wave count and the probable targets the red one are clearly indicating that wave structure in all their internal structures. It seems the wave-I is from around 6350 levels to around 5690 a fall of points 660 points and then the wave -2 was a flat and it rose from 5690 to 6178 a rise of 488 points which is nearly 73% of the fall of wave-I which is near the Fibonacci after that the third wave has started to form. Generally the wave-III would be the longest one except the market proves otherwise. If wave-III is to be longest then it would be nearly (at least) 1.618% of the length of wave-I. So the length of wave-III can be of 1067 points so the market should fall around 1067 points from 6178 so the target comes to around 5100 levels. we have to see whether the same is achieved or not. I have no doubt about the market moving there. The extention of the wave-III is proved as the wave-III is breaking into its components. When wave-III is extended then as per the internal structure wave-iii of larger wave-III would also extend and as per this assumption we have still some room left for the market to go down as the wave structure is not yet completed. So market would not make a strong come back till the entire wave structure is complete. It appears that it might complete around 5100-5200 levels so we have still nearly 300 points to move down before market makes a strong come back to form a wave-2. So till that time bears would rule the world. If the market reaches levels of 5150 levels then we have to be carefull as market might make a swift up move so just watch the market for further down sides.
Pivot Point Analysis:
As per pivot point analysis, yearly Pivot is at 5716 and it is clearly gives an indication that nifty is blow the yearly pivot and which is a bearish indication and till it is below it, it has chances of moving towards s1 and s2. S1 is placed at 5093 and s2 is placed at 4053 so till nifty stays below the pivot of 5716 we can see nifty drifting towards 5093 and 4093. So now currently 5093 should offer support to the market so watch out for market to move to these levels.
M.Sri Mahidar
Trend is Friend.
Sunday, February 6th 21.53 IST