nifty and bank nifty both have compleated TD sequential sell set up which is one of the powerfull reversal indicator. on completion of 13 this gives a sell indication. and as per this method we should see the market moving down very swiftly and we can see these markets moving towards the TD support line which are nearly at around 10% from current levels. so we should see the markets moving very swiftly downwards surprising every body. so if any body is expecting 6000+ in nifty in one to two months then as per this it might not happen. But there is one catch in it, this pattern can be negated only and only if it moves above the 13th bar indicated in the two charts. so if the high of the bar 13 plus filter is taken out then we can assume that the pattern has been negated. So now the questin comes what would be the price the movement above which we can assume the negation of this pattern. if BNF closes above 11920 and nifty if closes above 5850 then we can assume that the TD sequential sell has been negated. so brace for the fall in comming weeks.

M.Sri Mahidar
Trend is Friend
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last week i have written the weekly update but did not post in blog which i am posting now.
Weekly technical Analysis for week ended 23^rd   September 2012.

i am writing this update after a long time nearly two months, during these periods the market was boring in a tight range with sectors only moving up, I also took some time off from the market but following the indices closely till something remarkable happens and now so many thing have happened both technically and fundamentally during the last one week to 10 days which has prompted me to update my weekly update and look into the market in detail. I would be now continually updating about the market.

Now we see what the market has done, during the last 10 days bulls have virtually decimated the bears and suddenly from no where immense optimism has come to the market and now everybody seems to be talking about the market and its movement. So what the charts are indicating technically. Although I have been bearish on the market for more than one and half years, I respect price and if its moving up then what ever may be your study you should just follow it as that would only lead you to success in the market. in the current situation the market is bent on moving up and we should respect that sentiment and act accordingly rather that going against the trend.

On a weekly charts it has been an fantastic range stuck between 200 day MA and 100 day MA. Market has been finding support at the 200 day MA around around 4700-800 levels and resistance at around 5400 levels which happens to be 100 day MA. The market has been stuck between these two for nearly one year  and this week it was successfully able to move out of the range on the upside on the basis of positive news at both global level and also domestic levels. This range I have indicated long back and also have indicated that once this range is taken out then we can see market move on larger scale the side of the break. This time the break has upper side and bulls have won the race and now as the break out has happen for bulls now bulls should take the market up if they show any weakness then bears would pounce and it would be end game for bulls. Now we can hope the market moves on the upsides.  If it fails and to move and again moves into the range of last one year then it would give victory for bulls. Actually it’s now the true testing time for the bulls and now whether they would be able to defend their territory or not is a big question and we have to closely watch. As the range of consolidation is for nearly one year we might see the market retracing to the levels of the range to around 5400-50 range and then attempt to move up where in it gives an excellent opportunity to go long.

it can be seen in the chart below that the market was stuck between 200 day MA and 100 day MA and not current break out has happened.

Now the question comes what would be the move. As the long range consolidation has broken off and this indicates what we may not be surprised if a new high is seen. Historically the break out of consolidation of one year or more are huge so keep your fingers crosses as I new two to three weeks the trend is going to be confirmed. 

Now we apply Fibonacci retracement and then see what are the implications. The market has corrected from around 6350 levels to around 4600 levels a fall of around 1750 points and now the market has risen by around 1050-1100 points so now its exactly at the 61.8% retracement of the entire fall from November 2010 to December 2012. So whether the retracement has completed or not only time would tell but we are at exactly the important retracement of 61.80% so watch out. It market move up then we can see it moving towards the next levels of 5950 and then the new high.  But first we have to see what is in store for next three weeks where in the trend is expected to be confirmed.

Wolf wave pattern: Wolf wave pattern which is popularly called at WW pattern has formed on daily charts for nifty. Its an extremely powerful pattern with success rate of nearly 80%. I myself has tasted success most of the times. One of the important features of this pattern is that it also give the probable target and which happens to be around 5150-5200 levels. So will the market go to those levels WW is pointing towards that but there is a catch in this the confirmation would come only on close below the 5500 levels. So till it’s not taken out there should be no problem for bulls. You may thing I have again become bearish its not that I am only telling the implications of the patterns.

  

 M. Sri Mahidar

Trend is Friend

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Sunday, September 23^rd  22.37 IST

Weekly technical Analysis for week ended 16^nd  June 2012.

During the week nifty did nothing but just moving in a close band of 70 points only and this is frustrating for the markets. It clearly shows that market does not know where to go and was not able to move in any direction and it was waiting for the news to make a move. One day the news was good so moved up and the second day not so good news and it moved down again. Market was moving only to both international and national news.  This clearly shows that market is undecided and the further movement would depend entirely on news. The movement appears to be slightly in favor of bulls .I have observed in my short stint as a investor and trader that whenever market moves only on news the moves are not sustainable. It may be on upside or down side. The present market from the lows of 4800 appears to have moved entirely on news and not on its own. So my view is that the up move would not sustain as we cannot expect positive news continuously. It may be noted that the raise during the last 10 days was on low volumes which is clearly indicating the market participation is not so great. The volumes should be high during the rise this is the cardinal rule. But as I say price is the king and we should believe in it and what even may be our study when price is saying one thing just believe in it. So as of now the price is saying market wants to move up and it is the thing we should do. As of now market is trying to move above the major EMAs which is a positive news for the market. Market has moved above the 50 day and 200 day EMA which is a good sign. Its now just above the 200 day EMA which happens to be around 5070 and till market is above it bulls would try to dominate the market. This would be keenly observed by the market participants as any move below it would sound death knell for the bulls. 100 day EMA 5200 levels so market might find some resistance at those levels and it is taken out then we can see a good and healthy movement for the market as bulls would get confidence. It may be noted that on a weekly chart the nifty has formed a hammer which gives an indication the bulls are strong and they intend to take the market up. It may also be noted that 100 week EMA is at around 5400 levels and we can expect the market to find resistance at that level. In the previous upmove from lows of December we have found the resistance at that level only. Market moved above it and then collapsed to sub-5000 levels. so even in case of extreme positiveness in the market we might find huge resistance at 100 Week EMA. I have been observing that over the last five to six months market is oscillating between the 200 week EMA and 100 week EMA. It is finding support at the 200 week EMA and finding resistance at the 100 week EMA. In December it moved below the 200 day EMA/SMA and then move up and again found resistance at 100 week EMA/SMA. We have to see whether the same happens now also. So these are the areas which are to be observed closely. One of the important things which are to be observed is that market has been making consistently making lower lows till now from November 2010 onwards and this is the first time it has not made a lower low(means did not move below the low of December 2011 low) and if it moved above the high of 5630 its high then we can say that we are in the firm grip of bulls and till that is done we can only assume that we are still in a bear market. So we have to see whether the market would go up and make a new high for 2012 to would fail to do so and confirm that we are still in a bear market and would go on to make a new low for 2012. Even the Elliott wave is becoming more complicated and I am not able to give it as I myself am not in a position to confidently tell what it is.  I would try to work out on the same this week and give up the Elliott wave update in the coming weeks.

Positive for the market:

·         20 week EMA has moved above the 50 week EMA

·         Nifty has moved above the 50 week EMA

·         Market has moved above the 200 day EMA – big positive for the market.

·          Daily MACD is in buy mode and is moving up above 0 which is really a positive sign.

·          

Negatives

·         Weekly and daily MACD are in sell mode.

·         ADX +D and –D all the three are moving down which is indicating that market might not be trending.

·         Stochostic oscillator is in extremely over bought zone.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, June 17^th 20.50 IST

Weekly technical Analysis for week ended 2^nd  June 2012.Nifty ended the week on a weak note and it has closed below all the EMA which is a weak indication. Market continues to be weak and also its pointing towards further down sides in the market. During the current week nifty moved up and failed to moved above the 20 day EMA, it found resistance at that level and then fell which indicates weakness in the market. One of the positive things is that MACD has still not give a sell signal which gives an indication that when ever the market tends to move down buying might emerge but we have to see how the market actually behaves.one of the points to be noted is that from November 2010 onwards when even market has moved up and then moved down invariably it broke the previous low and we have to see whether this time also the trend is followed. If it has to be followed then we have to see a low below the dec 2011 lows which happens to be around 4544 will it go there. We have to wait and watch. When ever this phenomenon is violated that we can assume that bulls have gained strength and we can expect a healthy up move in the market. Till this happens we can expect the market consistently moving down and trend is continuing. One of the points to be noted is that nifty is again at the 200 week EMA and we have to see whether it again offers support or not.  In December nifty moved below the 200 week EMA and then reversed with vengeance and we have to not see whether that again offers support or not. 200 week EMA appear to be around 4800 levels. So we can expect the bulls to defend their territory which they have defended successful over three years. Bears are trying all their means to break through the support level but not successful. So considering this the 200 week EMA appear to be laxmanrekha for the bears, till they take the market below this rekha they cannot take the market down. So the coming weeks is going to be interesting week as we can see a keen tussle between bulls and bears and we can also expect the market volatility to increase. So till the 200 week EMA is taken out its not advisable to short at these levels. Wait patiently for this barrier to be taken out. It taken out I can assure that bull would run for cover. And historically seeing when ever 200 week EMA was taken out, market has tanked heavily. So have patience and wait for the lakshman rekha to be taken out and then bears can have field day.

On thing to be noted is that over the last three week nifty has made three weekly candles in which the low of each week is above the low of previous week which is a good indication for bulls especially when the market is near the 200 week EMA and it clearly indicates that bulls are preparing an ammunition to foil any attempt by the bears. So be carefull as the market might  be very volatile and we can expect unexpected movement in the market.

It can be seen from the below chart that nifty has been failing to go through the resistance line drawn from the January 2012 highs, at-least during the last three months It failed to move above and every time it moved near it selling pressure came and the market fell. The trend line appears to be around 5000-5050 levels so any up move might find resistance at this levels and we have to be watch out at these levels.

Still my soft ware problem is not rectified so I am unable to give my Elliott wave updates. This weekend also I am not available so may not be in a position to post the technical update. I would try to do it if the time permits and internet is available.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, June 4^th 20.24 IST

Weekly technical Analysis for week ended 19th May 2012.


nifty during the week was one of a weak market. It opened on a weak note and there after tried to conquer 4900 moved near 4950 and thereafter tanked on the weight of the international weakness. The way the market cracked indicates an extreme weakness in the market. The market has failed to move above the 200 day EMA twice and then started to fall very fast and when it fell it broke through many support levels. even the psychological level of 5000 level did not offer any support and market fell through the 5000 level like knife through butter. The way it pierced through 5000 it appears that bears are coming into the market in a big way and would make all attempts to take the markets down. I have also told in my earlier updates that any movement below the 200 day EMA bears would find upper hand. Nifty failed to move above the 200 day EMA which is clearly an indication that bulls doesn’t have strength to support the market and long term investor have failed to support them market which is a very bearish signal. i have been telling from last two to three months that above 200 day EMA bulls rule the market and below it bears. So as its below it all the up moves would be sold into so its better to be short in the market than long. Nifty is below all the major moving averages and the distance between the EMA is increasing which is indicating that bears are having strong hand and market would attempt to go down. So be prepared for this.

it has been observed that over the last one and half years from November 2010 onwards all down wards movements went below the previous low and we have to see whether this time also market would make an new low. If so we can see the market moving below December low which happens to be below 4550 levels. se we are still 350 points away from it. Will it go below 200 day EMA only time would tell. So have patience if you want to enter into market by buying shares. Still there is no divergence appears in the charts/oscillators which is giving an indication that market might reverse. It appears from the charts that all the positive days are only on the basis of short covering rather that genuine buying.





 



It can be seen from the above chart that we have formed a heads and shoulders pattern over a period of nearly two years which generally very strong and it can be seen from the above chart that nifty broke below the neck line in the month of august 2011 and moved towards 4500 and then again moved up touched the neck line and started to fall down it’s a perfect technical set up and generally the second fall after the touch of the neck line would be more dangerous and also achieves the targets and the target for the same would be the length of the head which is around 1300 points and the break of the neck line is at 5400 so we can expect a fall of 1300 points from 5400 giving a target of atleast 4100 which is nearly 800 points away will it go there we have to wait and watch.



I am not giving Elliott wave analysis as my technical software having some problem as all the wave counts are written in there I am not able to update the same here. but it appears that market is exactly moving as anticipated. So next week I would update on EW.



M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, May 20th 16.18 IST

nifty weekly update

Weekly technical Analysis for week ended 22^nd April 2012.

The market has been one of the boring for the last few weeks as it has not moved anywhere. For around nine weeks nifty has been moving in the range of 5200 to 5650. As can be seen when market comes to such a close range then it becomes very boring and also it also gives an indication that we are about to get into a big trending market which may be either up or down. If we take the up move from January onwards the rise from 4550 to 5650 it took nearly eight weeks and not the corrective mode from 5650 to 5200 has taken around astounding eight weeks and the market has corrected only 50% of the rise in possibly equal time periods which is giving an indication the we might has the possibility to move up or a give a good up move rather that the violent down move. You may be wondering this guy till now bearish has suddenly started to give an bullish picture. I only give what the market say as I always say price is the king remaining all is second. The weekly chart is given a more good indication that that of the daily chart.  Nifty is finding support at the 100 day EMA, it has found support nearly three times in last one and half month which is a clear indication that bulls are in the market and they are expecting the market on the upside. As I have been saying in my previous updates also we are in an uptrend and the market is going to make an attempt to move up till its above the 100 day EMA and 200 day EMA. The 100 day EMA is at 5213 so till its above it on weekly basis then we have all chances of market moving up and it may also be noted is market is nifty is finding support at 100 week EMA and till its above it, it is a good sign for the market the 100 week EMA is at 5207 so till market is above it we can expect the market to move up. So considering all this it appears that 5200 happens to be very good and a healthy support for the market and if it is taken out on down side then we can expect the market to fall very violently but till its above it we have all the chances of market moving up only. So 5200 appears to be laxman rekha for the market. So till above it hope for the market to move up   

The weekly chart is given below you can clearly see that the market is in a corrective mode for the last two months and slowly drifting down and also notice the volumes are also very low which is indicating that the interest is slowly drifting down and we may suddenly see interest setting in indicated by the volumes and the market would move in a trending way and that too longer that the earlier one. So we have to wait for the volumes to increase and show us the direction.  

Positive for the market:

·         Nifty is above 200 day EMA

·         Market is above 200 week EMA.

·         50 day EMA has moved above 100 day EMA which is a bullish signal

·         Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.

·         Daily MACD has given a buy signal.

·         Daily stochastic oscillator is in buy mode but is at around overbought levels.

·         Weekly stochastic oscillator has give a buy signal

·         One of the big positive signal which has been generated is 50 week EMA has moved above 100 week EMA and also 15 week EMA has moved above all the three.

Negatives

·         Monthly MACD is in sell mode indicating weakness in the market.

Elliotte wave analysis: As there is nothing much change in the EW structure I am not giving the same I would give the updated structure in the coming week.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, April 22^nd 10.12 IST

Weekly technical Analysis for week ended 7^th April 2012.

I am writing this update after nearly three weeks of absence. First of all I would like to say sorry for that. As I was travelling extensively on weekends I was not in a position to update on the same. But have been following the market closely. Technically nothing major change has happened. Now we would come to the market. This has been the truncated week for the market so nothing much seems to have happened during the week. During the previous weeks the market has taken support exactly at 200 day EMA, nifty moved below the 200 day EMA and thereafter moved above it which is a clear sign that long only investors (long term investors) are staying in the market and as providing support to the market. Till market is above it we can safely assume that bulls are strong and all the down side moves are bought into and falls would be shorter and the rise would be faster and would be longer than that of fall. So technically we should see for buying opportunity rather that the reverse. There seems to be nothing much change in the elliotte wave structure which I would discuss at the relevant section. Technically both daily and weekly charts are showing strength and I may not be surprised if the market moves up surprising everybody. One of the positive thing about the current down move is that it is on low volumes and also the re-tracement has taken more time which is clearly indicating that bulls are supporting the market and at present they are not surrendering to the bears. So till the situation reverses we can expect a decent up move. Also the weekly MACD is in buy mode and also the Daily MACD has give a buy signal which is a clear signal we have all chances of marching upwards from here. it may also be noted that nifty has exactly taken support at the sloping trend line which it has broken in January 2012 it is indicated in the chart below. And also the weekly chart also is showing some bullish sentiment. There is convergence of EMAs,50,100 and 15 week EMA. So we can see market moving in one direction in a big way when EMA diverge and the movement would be in the direction of divergence of EMA. So we have to closely watch the same.

it can be seen from the above chart that nifty has taken exactly support at the sloping trend line(red color) drawn from the high of November 2010. The point of contact is indicated by the blue elliptical figure.

Positive for the market:

· Nifty is above 200 day EMA

· Market is above 200 week EMA.

· 50 day EMA has moved above 100 day EMA which is a bullish signal

· Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.

· Daily MACD has given a buy signal.

· Daily stochastic oscillator is in buy mode but is at around overbought levels.

· Weekly stochastic oscillator has give a buy signal

· One of the big positive signal which has been generated is 50 week EMA has moved above 100 week EMA and also 15 week EMA has moved above all the three.

Negatives

· Monthly MACD is in sell mode indicating weakness in the market.

it can be seen from the above that the positive signs are slowely coming So the market would surprise us? We have to wait and see.

Elliott wave analysis:

I have indicated few weeks back that we might be in formation of an expanding triangle as a second was of the “C” wave of a flat. And it seems that the 5^th wave of the expanding triangle still seems not to be over and we can expect it moving up again. It seems that the fourth wave of the 5^th wave of the triangle is complete and we might have started the 5^th wave which has chances of moving near the 5600 levels. so we have to see whether market responds accordingly or not. the updated elliotte wave structure is given below in the chart.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Saturday, April 7^th 11.27 IST