Nifty this week opened on a week note and continued to moved down and closed at 4700 levels. One of the noticing features of the current weeks movement is that nifty has moved below 4700 and made a new 52 week lows thus giving an indication that bulls are successful taking market lower. Till now 4700 was offering support for nearly three months time and this week it was conquered by bears which is clearly indicating that further down sides are not ruled out. Another important thing which has happened during the current week is that nifty has moved below the low of 2010(previous year) this even has occurred only once before in the last one decade, 2008 was the only year when nifty has moved below the previous years lows and in that instance it has fallen by around 30% from those levels and if this time also it falls to that extent then we have chances nifty going below 3500 levels. So will it go there only time would tell the same? We have to wait for weekly close below the previous year’s low of 4675 would confirm that we are in for a bigger trouble for bulls. Another important technical event which has taken during the week is that nifty has moved below the 200 week EMA this has happened for the third time in last three months. In august it closed below 200 week EMA but in October twice it found support at that level and not in November it broke with ease the 200 week EMA which clearly indicates that now it would becomes a formidable resistance. Now nifty should move above the 200 week EMA in the coming weeks otherwise bulls would have tough time in coming months. 200 week EMA is at 4855 so this is the level which we should keep an eye. Nifty has been moving between 200 day EMA and 200 week EMA for last four months and this time the floor was opened giving an indication that bears would be dominating the market in coming time. Technically we are entering into a very crucial level we are entering into the gap up opening levels of may 2009 post election results and any move below that level would result in market just collapsing vertically in which case bulls would be decimated. So any move below 4400-4500 has all chances of market collapsing very violently. So keep a close watch on those levels as we may have a good buying pressure at those levels if those bought at those levels would not support the market then we can have a serious trouble for bulls. Technically it appears that the coming new years is going to be good for bears.
Positive for the market:
• Daily stochastic is in buy mode indicating that we might see a short up move.
Negatives
• Market is finding resistance at 200 day EMA.
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Daily and weekly MACD has a given a sell signal.
• Weekly Stochastic is in a sell mode.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
From so many weeks I have indicated that we might be forming an expanding triangle and it appears that we might have completed fourth wave and it appears that we have started the fifth wave and it appears as per the current wave structure and we might have completed the 1st wave of the fifth wave and it appears that we might have completed 2nd wave of the 5th wave and it seems that we might has started the 3rd wave of the 5th wave and generally the 3rd wave would be most violent and devastating and the longest, which is being indicated by gap down opening. The first wave of the 5th wave was around 750 points and the second wave was nearly 61.8% of the first wave and wave would normally be at-least 161.8% of the first wave so we have chances of correcting around 1250 points from the end of the second wave of the 5th wave which happens to be around 5700 levels giving us a target of 4500 and we have nearly achieved the same. But still nifty has to violate till then it would hold good.
The updated wave structure is now being given. This structure has to be negated if 5453 is violated and I have to work out the new structure. As of now it appears that we have completed fourth wave of the third for the fifth wave and we are in completion of the firth wave of the third wave of the fifth after completion of that we might see market raising up and there after we might start fifth of the fifth wave of the expanding triangle and this would have to be more violent in case of expanding triangle
M. Sri Mahidar
Trend is Friend.
Sunday, November 27th 21.32 IST
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