Weekly technical Analysis for week ended 1st October 2011.
This week the market is of mixed trend, but it still showing a weakness and it appears that bears are active even during the current week also as out of five trading days three days were bear candle days even though nifty closed with a positive candle. This clearly indicates that the closes were lower that the opens, thus indicting that the close were at the lows of the days. This week nifty opened on a weak note with gap down and there after recovered and moved up and moved above the psychological level of 5000 and on Friday even though it moved above 5000 it again collapsed down to close below 5000 second week in a row. There are so many things which are happening during the week technically and every thing is pointing out that bears are slowly and steadily becoming active and it appears that we are nearing days when capitulation is going to take place in near future where bears would just demolish bulls. Till now at every stage the bulls are coming back and trying to take market up and failing and the time/day would come were they would completely surrender to bears and we might see some vertical falls in coming weeks or months. One thing is sure that until the capitulation takes place the market is not going to turn up. I have seen in my short technical career that till there is a vertical fall( which generally is the last stage of the fall) there bear market is not going to end. So we have to wait patiently till the vertical 90% fall happens till then the market would be drifting slowly downwards. Now we come to the technical features which have occurred. One of the powerful thing is that 50 week EMA has moved below 100 week EMA which is a very bearish indication. this even has happened for the first time after may 2009 which itself is an indication of weakness. I would explain the thing in details which clearly gives the bullish and bearishness in the market. The 15 week EMA moved above 100 week EMA in 2003 and it maintained above it for till September 2008( it was in bullish mode till 5 years) when it moved below 100 week EMA and there after market collapsed you know that its still fresh in our memories. And one this which is to be noted is that this time also it moved below 100 week EMA in September only so will there be any co-incidence this time also, if that happens then we are in for a big big fall this month which happens to be in October. Another thing to be noted that in 2008 Diwali was in October that too on October 28th and just before diwali the market tanked and made low on a day before diwali. This time also diwali is on 26th so will history repeat itself. Wait and watch. It has been seen that in October is the month where if it’s a bull market the market just races up and if its bear market the markets just tank. So we have just entered into October and we seem to be in a bear market so will we see a good and healthy fall in the market and form a bottom. Just wait and watch And another thing is that nifty again moved below the 200 week EMA during week and there after recovered and closed above it. 200 week EMA is at 4838 and any move below it would signal bearishness in the market. So now 4838 is the level to be closely to be watched. So keep your fingers crossed, and patiently wait as we may get good prices which can be lower that the prices as of not at-least 30-40% lower than the current levels.
It can be seen in the below chart the movement of the 15 week EMA below 100 week EMA by a red circle. This event has happened for the first time after nearly 27 months indicating weakness.
This week the market is of mixed trend, but it still showing a weakness and it appears that bears are active even during the current week also as out of five trading days three days were bear candle days even though nifty closed with a positive candle. This clearly indicates that the closes were lower that the opens, thus indicting that the close were at the lows of the days. This week nifty opened on a weak note with gap down and there after recovered and moved up and moved above the psychological level of 5000 and on Friday even though it moved above 5000 it again collapsed down to close below 5000 second week in a row. There are so many things which are happening during the week technically and every thing is pointing out that bears are slowly and steadily becoming active and it appears that we are nearing days when capitulation is going to take place in near future where bears would just demolish bulls. Till now at every stage the bulls are coming back and trying to take market up and failing and the time/day would come were they would completely surrender to bears and we might see some vertical falls in coming weeks or months. One thing is sure that until the capitulation takes place the market is not going to turn up. I have seen in my short technical career that till there is a vertical fall( which generally is the last stage of the fall) there bear market is not going to end. So we have to wait patiently till the vertical 90% fall happens till then the market would be drifting slowly downwards. Now we come to the technical features which have occurred. One of the powerful thing is that 50 week EMA has moved below 100 week EMA which is a very bearish indication. this even has happened for the first time after may 2009 which itself is an indication of weakness. I would explain the thing in details which clearly gives the bullish and bearishness in the market. The 15 week EMA moved above 100 week EMA in 2003 and it maintained above it for till September 2008( it was in bullish mode till 5 years) when it moved below 100 week EMA and there after market collapsed you know that its still fresh in our memories. And one this which is to be noted is that this time also it moved below 100 week EMA in September only so will there be any co-incidence this time also, if that happens then we are in for a big big fall this month which happens to be in October. Another thing to be noted that in 2008 Diwali was in October that too on October 28th and just before diwali the market tanked and made low on a day before diwali. This time also diwali is on 26th so will history repeat itself. Wait and watch. It has been seen that in October is the month where if it’s a bull market the market just races up and if its bear market the markets just tank. So we have just entered into October and we seem to be in a bear market so will we see a good and healthy fall in the market and form a bottom. Just wait and watch And another thing is that nifty again moved below the 200 week EMA during week and there after recovered and closed above it. 200 week EMA is at 4838 and any move below it would signal bearishness in the market. So now 4838 is the level to be closely to be watched. So keep your fingers crossed, and patiently wait as we may get good prices which can be lower that the prices as of not at-least 30-40% lower than the current levels.
It can be seen in the below chart the movement of the 15 week EMA below 100 week EMA by a red circle. This event has happened for the first time after nearly 27 months indicating weakness.
Positive for the market:• Nifty has exactly taken support at 200 week EMA.
• Daily MACD is in buy signal.
Negatives
• Nifty is trading below, 50 day, 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,
• Daily and weekly stochastic 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: nothing much has happened as EW during the week to change any thing so it remains same as it is.
M.Sri Mahidar
Trend is Friend.
Sunday, October 2nd 19.26 IST
very very nice analysis !!!! very useful for new learners !!!! Thanks a lot !!!!
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