Weekly technical Analysis for week ended 14th May 2011.
The movement of nifty during the market was something of a sideways movement. It did not move any where it was stuck in range of 150 points between 5450 and 5600. It appears as of now the nifty is struggling to move above the 5600-5650 levels. it appears That we might see a big movement on close above 5650 levels or below 5450 so we have to patiently for movement above or below those levels and till then it is better to be an outside viewer. On a weekly chart nifty has formed a red candle indicating that bears were able to close the market below the opening but the slight long tail is indicating that bulls were able to take the market up from low levels. So any break of the low of the would signal a very swift fall. One of the noticing features of the market is that nifty is still maintaining below all the major moving averages be it 15 day,50 day 100 day and 200 day EMAs indicating that market is weak. Another noticing feature of the market is that there appears to be a confluence of moving averages and now whichever direction the market moves the movement would be very big. So we have to patiently wait for the directional movement of the market.
The movement of nifty during the market was something of a sideways movement. It did not move any where it was stuck in range of 150 points between 5450 and 5600. It appears as of now the nifty is struggling to move above the 5600-5650 levels. it appears That we might see a big movement on close above 5650 levels or below 5450 so we have to patiently for movement above or below those levels and till then it is better to be an outside viewer. On a weekly chart nifty has formed a red candle indicating that bears were able to close the market below the opening but the slight long tail is indicating that bulls were able to take the market up from low levels. So any break of the low of the would signal a very swift fall. One of the noticing features of the market is that nifty is still maintaining below all the major moving averages be it 15 day,50 day 100 day and 200 day EMAs indicating that market is weak. Another noticing feature of the market is that there appears to be a confluence of moving averages and now whichever direction the market moves the movement would be very big. So we have to patiently wait for the directional movement of the market.
It can be seen in the above chart that nifty is forming a flag pattern and that too raising. Generally flag patterns signal the continuation pattern indication that market moves in the direction prior to formation of flag and in the present case it is down so after completion of flat the market should continue its downward journey. But we have to wait and see finally in which direction the market moves. Probability is on the down side.
Positive for the market:
· Daily stochastic has just give a buy signal
Negatives
· Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
· Daily stochastic oscillator has given sell signal and is moving down.
· 50 day EMA is still trading below 200 day EMA indicating weakness.
· Weekly MACD has given a sell signal indicating weakness,
· Daily MACD is in sell move and is below the signal line.
· Monthly MACD is in sell mode indicating weakness in the market.
Elliott wave analysis:
Positive for the market:
· Daily stochastic has just give a buy signal
Negatives
· Nifty is trading below 15 day, 50 day, 100 day and 200 Day EMA.
· Daily stochastic oscillator has given sell signal and is moving down.
· 50 day EMA is still trading below 200 day EMA indicating weakness.
· Weekly MACD has given a sell signal indicating weakness,
· Daily MACD is in sell move and is below the signal line.
· Monthly MACD is in sell mode indicating weakness in the market.
Elliott wave analysis:
In previous weeks I have indicated that we might be forming an expanding triangle and we are in formation of the fourth wave and after completion of the same we can see fifth wave developing which would take the market down very swiftly and it would be very violent and also the longest of all the waves. The longest wave till now is of length 1000 points so the fifth wave would be of at-least 1000 length so we have to prepare for the same or would be Fibonacci relations and generally 138.10% or 161.8% so if the pattern is confirmed then we have some amount of trouble coming into the market.
It appears that we might have completed wave-i of the wave -5 of the triangle is of length 450 points and it appears that we are in the wave-ii of wave-ii after which wave-iii would begin and which would be most disruptive and it would be at-least 1.618 times the wave-I so it can be of length of at-least 750 points which clearly indicates that we might see nifty drifting towards and below 5000 levels.
It appears that we might have completed wave-i of the wave -5 of the triangle is of length 450 points and it appears that we are in the wave-ii of wave-ii after which wave-iii would begin and which would be most disruptive and it would be at-least 1.618 times the wave-I so it can be of length of at-least 750 points which clearly indicates that we might see nifty drifting towards and below 5000 levels.
Wolf wave:
In my previous updates, I have indicated nifty has formed a wolf wave and any close below 5700 on weekly basis would confirm the same, we are just near 5700 so if it is confirmed during the current week then we have all chances of taking the market below 5000 as per this so be prepared for the same once the same is confirmed. As Nifty has closed below 5700 on weekly basis it seems that we are on our way to sub-5000 levels.
M.Sri Mahidar
Trend is Friend.
Sunday, May 15th 18.22 IST
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