Nifty Update

As i have indicated in my earlier posting that the wave patern indicated by me would be negated if nifty moves above 5700. The reason being the wave-4 should in no case move into the region of wave-1. Considering this, i have to change both the higher wave and lower wave structure. I have thought of different alternatives and it is only in formation of the triangle be it contracting triangle or the expanding triangle the wave-4 moves into the area of wave-1. In the present case it appears that we are forming an expanding triangle which is indicated in the chart below. it appaers that we have compleated wave-3 and might have compleated nearly 60% of the wave-4 and after completion of which the wave-5 would start and i happens to be the most distructive of the all and the longest of the all. The targets etc., would be furnished in my comming weekly updates. This is the best alternative which i can see in the current schenario. The same pattern has formed between jan to may 2004 and the market has tanked in may 2004. so we have to see whether the same would be repeated or not. so just wait and watch. the current wave has all chances of seeing 5900-5950 levels. so another 100 to 150 points from current levels.

CNX - IT

NIfty

Nifty

Weekly technical Analysis for week ended 19th March 2011.
Nifty during the week moved in a close range. It was very frustrating for traders during the week as the behavior of the market was very peculiar. It was gap up opening and another day gap down opening and was directionless. For the last three week nifty has been moving in a very tight range of around 200 points, it was finding resistance at 5600 and support at around 5300 levels. One of the features of the current movement is that the movement during the last three weeks is on very low volumes that the average indicating the traders are not sure which direction of the market and they are not betting on the direction. Now we have to see for break out away from these two levels and whichever the direction the break out the movement would be big and the market would move in that directions in a big way so patiently wait for the same, but the odds are in favor of downward break out the reason for the same is given in the following lines. As I have been indicating for the last so many weeks nifty is trading below 200 day, 100 day and 50 day EMAs which is generally a bearish signal. Nifty is finding resistance 50 day EMA it failed twice to move above it in last three weeks and this is a bearish signal and is pointing that selling pressure is coming at around 50 day EMA. Even if it moves above 50 day EMA, 200 and 100 day EMA are just above it and it appears that it would not be easy for the market to pierce at this point of time. One of the thing which I have indicated earlier also that 50 day EMA has moved below 100 day EMA and this has happened for the first time after April 2009, generally this is known as a deadly cross and a very bearish signal and another point to be noted is that the distance between them is increasing indicating the strength of the bears is increasing and further downwards are not ruled out

It can be seen in the above chart that nifty has failed to move above the 50 day and the 100 day EMA and also can be seen that the distance between the 50 day and 200 day EMA which is a very bearish signal. So all this is pointing towards bearish break down. So till nifty closes above all these three EMA bulls cannot feel comfortable, so till nifty closes above 5700 nothing can be said for bulls.
On weekly chart nifty has formed an inverted hammer indicating bears were strong at the end of the week. Bulls have tried to take the market up but failed to sustain and bears were successful in keeping the market down. In the coming week selling should come to confirm the bearishness. Also the closing on Friday would not give comfort to the bulls.
Nifty has huge support at around 5200 levels, so any close below it on daily and preferably weekly basis would be a very bearish signal and we have all chances of nifty moving towards 5000 and sub 5000 levels towards 4700 levesl.
Negatives for the market:
· Nifty is trading below 50 day, 100 day and 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.
· The deadly cross of 50 day EMA moving blow 100 day EMA and also 200 day EMA has happened which is clearly indicating extreme weakness. And on Friday it moved below 15 day EMA.
· Daily stochastic oscillator is in sell mode.
· Daily MACD is about to give a sell signal any slight movement on down side would generate sell signal in MACD.
Positives developing:
· Daily MACD has given a buy signal.
· Weekly Stochastic oscillator has just give a buy signal
Elliott wave analysis:

Generally Elliott wave give a clear picture when there is uncertainty, and Elliotte is giving the same. in the chart the larger wave count is given in red color and the further lower structure is given in blue wave count and the further lower wave count is given in black color. It appears from the chart that we are in the third of the third wave and in the third wave we are nearing the completion of the fourth wave, after completion of which we should start a fifth wave which would take the market down. Here the wave-iv appears to have formed a triangle and there is alteration between the 2nd and fourth wave and also the second wave was very short and swift and the fourth wave is slow and time consuming indicating the confirmation of the pattern and also during the formation of triangle the volumes decrease considerably and would increase at the time of break down. For the last few week till the time the triangle has started to form the volumes has decreased considerably confirming the pattern. I am not sure at this point of time whether wave –v of the triangle is complete or not. but sure that on completion of the same the market would fall down swiftly towards 5200 and then 5000 levels at-least. So wait for the break out. nifty should not in any case move above 5700 to confirm this pattern any move above 5700 would negate this pattern and at that time I would give you the alternate structure.

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, March 20th 19.46 IST

Nifty Elliotte Wave Update

The movement of nifty is puzzling every body and also its stuck in a range, giving headaches to the traders and investors. we are seeing one day gap up another day gap down, this coupled with very reduced volumes is just increasing the headaches. In these times of uncertainity and absence of clear picture we has to see what elliotte is telling or indicating.

Elliotte wave update has been given in the chart above and it appears that we are in the third of the third wave and in the third of third we are forming a fourth wave after which the market has all chances of opening down wards towards 5000. it appears from the above and as per the elliotte that we are forming a triangle for the last one month or so the reduced volumes are also indicating that we might be forming a triangle and also every body is loosing interest in the market as it is moving in a close tight range this is the peculiar feature of the triangle( where volumes reduce considerably). it appears that we might have compleated wave four of the triangle and we are moving up towards completion of wave five of the triangle and after which the gates downward should open up taking market towards 5000 and probably sub-5000 levels so wait and watch. you might be wondering why it should move down and not up. Generally in a triangle the break out would be in the direction of the wave- two of the triangle and the wave two is down wards giving an indication the break down would towards 5000 down wards. so keep a close watch on completion of fifty wave. please note the volumes today were also lower that all previous days. So have patience we would get a very very good shorting opportunity.

M.Sri Mahidar
Trend is frind.

Infosys will 200 day EMA offer support?

What does India vix says

Bank Nifty

Crude

Crude seems to have broken above a formadable resistance. it can be seen from the chart above that crude has been able to break above the resistance which it failed to break above it atleast four time in last one and half years. So the break out appears to be genuine and appears that it would not end in a hurry. The correction during the last one week or so appears to be a normal one. Generally after break out the prices move up then stop then come to the support line( resistance earlier) and the second one would be the biggest one and move substantially. so it appears that crude might cool off to sub-100 levels probably towards 95 and then would start a big up move. whether this pattern would be followed its a billion doller question, but as a technitial it is the most probable picture which it appears. one thing is sure tll crude is above 86 bulls should not be worried.

M.Sri Mahidar
Trend is friend.

Weekly technical Analysis for week ended 5th March 2011.
This week was one of the eventful week as there was budget on Monday February the 28th. The market was very volatile on the day of budget and there after started to moved up for whole of the week. After so many weeks we have seen good green candle. Does this indicate good news for bulls, the answer appears to be no as the volumes are not good during the entire week. The volumes were heavy only during the day of budge where in the market moved very wildly and closed at the near low of the day thus indicates that bears are strong and during the remaining days even though the market has moved up with convincing bull candles the volumes were not so encouraging for bulls. One of the important technical events which is waiting to happen and which could determine the movement of the market in coming weeks the direction is to be shown by the market. Nifty nearing one so many resistance levels, it is nearing or near confluence of EMA,It is near 200 day,100 day and 50 day EMA. Generally markets find resistance or support at confluence of EMA. This time it appears that they might act as a resistance. It can be seen from the chart on Friday market has reacted from 200 day EMA whether the same would be continued in the coming week we have to wait and see. All these EMA are moving down indicating that the down slide is possible unless and other wise markets move up very very swiftly and stays there till that time we have all chances of markets moving down. Another important technical event which has taken place during the week and it has also be overlooked by majority of analysts is that 50 day EMA has moved below 200 day EMA this is a very bearish signal and it is to be noted is that this is has happened for the first time after may 2009, it has moved below it after nearly 21 months(Fibonacci again) signifies that it is going to stay there for some longer time or months and till it stays below it we can continue to see markets moving down and all rises should be seen as an opportunity to liquidate our holding or taken as an opportunity to go short.

Negatives for the market:

· Nifty has moved below 200 day EMA during this week nifty has reacted from 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.
· 50 day EMA, 100 day EMA
· The deadly cross of 50 day EMA moving blow 100 day EMA and also 200 day EMA has happened which is clearly indicating extreme weakness.
· Daily stochastic oscillator is in sell mode.
Positives developing:
· Nifty is above 15 day EMA.
· Daily MACD has given a buy signal.
· Weekly Stochastic oscillator has just give a buy signal

Elliotte wave analysis: There is nothing new to that which has been given in my previous update. I would try to give you next week.
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, March 5th 20.32 IST