Weekly technical Analysis for week ended 2nd April 2011.
Nifty opened on a strong note and continued to move up whole during the day indicting the strength of the bulls. From the last two weeks onwards bulls have been dominating the market. The bulls have take the bears by surprise and are continuing to surprise them. One of the positive features of the of the current movement is that nifty has moved above all the three major moving averages, 50 day 200 day and 100 day EMA and is staying above them indicating strength of the bulls. Previously it was finding resistance at the 100 day EMA 200 day EMA at-least thrice and this time has moved above them without any difficulty which is clearly indicating the bulls are here with a purpose. Another positive feature which is in favor of bulls is the Daily MACD has given a buy signal and market has started to move up after that and it has moved above the trigger line i.e above the 50 line and is continuing to rise and also the distance between the trigger line and MACD is increasing indicating the bulls are gaining strength and they has all chances of taking the market further up.s Positive for the market: · Nifty is trading below 50 day, 100 day and 200 Day EMA. · Daily MACD is in buy mode. · Weekly MACD is about to give a buy signal and if that happens then bulls would be further strengthened. · Daily Stochastic oscillator is about to give a sell signal negatives developing: · Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into. · Weekly Stochastic oscillator has just give a buy signal · 50 day EMA is still trading below 200 day EMA indicating weakness. · Monthly MACD has given a sell signal indicating extreme weakness in the market.
Elliott wave analysis: Generally Elliott wave give a clear picture when there is uncertainty, and Elliotte is giving the same. I have indicated in my Elliott wave updates that any close above 5700 would negate my wave count given earlier we have to see for alternative structure. Nifty has moved above 5700 comfortably and is place at around 5900 comfortably. Now we have to see for alternative structure. Here wave-4 has moved into the area of wave-1 in case of lower and also higher wave structure, which give an indicating that the wave structure selected by me was wrong. The wave-4 goes into the area of wave-1 in case of a triangle whether expanding or contracting triangle. In the present case it appears that we might be forming an expanding triangle. The wave structure formation is given below
It can be seen in the above chart that we are in formation of an expanding triangle and it seems that we are in formation of fourth wave. In the triangular pattern we have only five waves and the case of expanding triangular pattern the fifth wave would be move violent and would be the longest of all the waves and would be in the Fibonacci relations with the previous longest waves. So the longest wave till now appears to be 1000 points so we can see Fibonacci relations with that and it would be more than 1000 points from the completion of the fourth wave. Generally the fifth wave in the expanding triangle would the longest and the more swift and would surprise everybody that means that everybody would be caught unawares. So it appears that the fourth wave should complete around 5900-6000 levels it appears that we are nearing the completion of the fourth wave whether we would start the down move in time to come or not only time would tell. Bulls should be care full at the present as we are nearing the completion of the fourth wave. So we have to see whether the pattern is confirmed or not. if the market moves up without correcting then we have to change the entire structure and it becomes a very very bullish pattern. But now we have to see what enfolds. The pattern is similar to that has been formed in January to may 2004 which is given below: 
You see the fifth wave which is from around 1900 to around 1300 levels that have been the longest and the most volatile. Whether the same would happen now we have to wait and watch. Generally in an expanding triangle very body gets bullish on completion of the fourth wave and then the market suddenly turns the same seems to be happening now and the same was in april 2004 so we have to see whether the same happens now or not. just wait and watch.
You see the fifth wave which is from around 1900 to around 1300 levels that have been the longest and the most volatile. Whether the same would happen now we have to wait and watch. Generally in an expanding triangle very body gets bullish on completion of the fourth wave and then the market suddenly turns the same seems to be happening now and the same was in april 2004 so we have to see whether the same happens now or not. just wait and watch. M.Sri Mahidar
Trend is Friend.
Monday, April 4th 20.17 IST
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