Weekly technical Analysis for week ended 25th February 2012.

Nifty for the first time during this year has formed three continues red candles which is indicating the bears are at-least active for short time. One of the noticing feature of the current down movement is that it has broken the trend line drawn from the low of the January this year indicating the at-least for short term the market is weak and we can expect the market to move down. Nifty is exactly at 15 day EMA we have to see whether it would offer support or not if it does then we can see it moving up and testing or go near the top. If it does not we can expect the correction to be big which can take nifty to first 5373 and it is taken out we can see it moving towards 5212. So now we have to see whether 5373 would offer support or not. Another thing to be noted is that market has started to correct after all the technical oscillators are in extremely in over bought position which generally associated with larger correction. We have to see whether the same would be or not. Another noticing feature of this fall is that the volumes have increased substantially during the fall this is against the strength of the bulls.

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 stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily RSI is moving into over bought zone above 78 which it went only during the highs of October/November 2010 and may/june 2009.
• 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.
Negatives
• Daily MACD has given a sell signal
• Daily stochastic oscillator is in sell mode and moving down indicating weakness in market.
• Weekly stochastic oscillator has give a sell signal and moving down indicating that we have chances of seeing the market down.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

Elliott wave analysis:

I have analyzed EW and can analyze the best possible analysis at this point of time. I have arrived at the wave structure after much analysis and it appears that we have completed the wave –I of the five wave down and we not appear to be in the wave –II of the five wave down and after which we might start the third wave which should be destructive of the all are we coming near the top which might not be broken at-least for first six months of the current years. I am also working on other alternatives which I would furnish when it satisfies me. It appears that we have been forming wave-II in form of the an expanding triangle and it appears that we are in the fifth and final wave of the expanding triangle and after completion of the same we can expect the entire rise to be erased. we have to see the same whether it materializes. If the analysis is correct I have no doubt on this.


M.Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, February 26th 21.57 IST

Nifty Weekly Analysis

Weekly technical Analysis for week ended 18th February 2012.
What a journey for nifty. It has been rising continually for last 7 weeks longest in last five years. one of the noticing features is that low of the succeeding week has never gone below the low of the previous weeks low which is indicating a very bullishness in the market. But technically it seems that the rise has too much and major oscillators have been in an overbought zone for last three weeks. I have indicated that over bought zone of the oscillators indicates extreme bullishness of the trend and we can continue over bought till it reverses so we should not short just because the indicators have gone into over bought zone. We have to wait for the price to confirm reversal till then have patience as I always say price is king. If we go by Fibonacci time periods we have completed 8 weeks of rise from the low of 4521 which consisted of 7 continues weeks of rise. So we have completed a Fibonacci time period and we have chances of correcting considering the completion of the frame. Another noticing feature of the current move is that nifty has retraced 61.80% of the fall from November 2010 in just 8 weeks and it has just reversed from after touching 61.8% retracement level. As the market is in extremely over bought position we can expect correction in coming week as the 61.8 retracement is here. Market might pause for some time and then make an attempt to move above 61.8% retracement. As the movement above it would market a significant event as then it would make an attempt at making a new high. But that event is far away and we would not talk about it now. one of the noticing features which I have noticed is that nifty has not moved below 5 day EMA in the entire rise and now we have to wait for it to close below 5 day EMA to expect a downward movement in the market till then it would always try to move up. 15 day EMA is at 5350 so we can expect market to move to 15 day EMA if any correction happens which happens to be 200 points from current levels. the 200 day EMA is also stationed at 5163 so till that is taken out we can safely assume that all the down movements would be bought into. One of the strongest thing about the market is that on weekly charts market has formed a higher high which is a very bullish signal and we have to wait for the same to reverse till the lower low is formed so as to start a down trend.
It can be seen from the chart that we are in formation of an expanding triangle and we are in formation of the 5th wave of the expanding triangle( as shown in the chart below) from last five months and its still seems that we have still not completed that fifth wave and we are in completion of the 3rd of the fifth and after which fourth would come and fifth would be formed after which we can see market correcting towards 5200 levels.
The current move has resulted in correcting the total wave count from the high of November 2010 and its not properly fitting into the proper count so I am not so confident of the count and it seems I have to see for in-depth analysis of EW count to arrive at the probable count so that we can proceed on the same. one thing is sure we might have surely completed a significant wave at around 4500 as market has reversed nearly 61.80% of the total fall so I have to rework and I have tried alternately and as of now none of them are fitting properly it seems I have to properly analysis the EW and then arrive at wave count. So I would furnish the same as soon I am able to arrive at the count.

Positive for the market:
• Nifty has moved above 200 day EMA
• Market is above 200 week EMA.
• 50 day EMA has moved above 100 day EMA which is a bullish signal
• Daily MACD is in buy mode and moving up indicating the up move may continue.
• Weekly stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily stochastic is in buy move but in extremely overbought zone indicating that we might see a slight reversal in coming days.
• Daily RSI is moving into over bought zone above 78 which it went only during the highs of October/November 2010 and may/june 2009.
• 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.
Negatives
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
M.Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, February 19th 20.03 IST

Weekly technical Analysis for week ended 11th February 2012.
The movement of the market during last one month might have surprised even the hardest of the bulls and bears were bruised the most. Everybody is surprised by the present move and majority of the players have missed the rally they are really waiting for the market to correct slightly so that they can enter into the market and they are doubting whether they can get that opportunity or not or the market would go all the way to make a new high. Now comes the question whether we are into the new bull market and whether we would make a new high. As per my analysis we are far away from that. In my view its still a corrective rally at the end of which we might see a very big correction. But one thing to say don’t ignore the trend as it is what market the market and you can make money only by following the trend and not going against the trend. But as far as my Elliott wave analysis goes it is giving an indicating that we are just in an uptrend is a major down trend and once the up trend is over we might see the market going down very viciously. Whether this would happen I don’t know but my analysis tells that and we have to be patience as time would tell the difference. Now we come to the market as of now. The market is showing considerable strength and bulls are trying all the means to decimate bears and whether they would be successful? They have been successful till now. So what are the things which are indicating strength of the markets? The market is trading above 200 day EMA which is clearly the strength as bulls survive above it and bears below it. Another strong indication is it has broken the trend line drawn from the high of November 2010 which is a very strong indication. nifty has also formed a higher high after a long time which clearly indicates that bulls are strong. Now we have to see whether we make a higher low or not. If we continue to make the same then we can see the market moving up.

It can be seen from the above chart that market has broken the trend line drawn from the high of November 2010 indicating strength. Also not the very high levels of RSI and MACD indicated by arrows. These two indicators are at those high levels last time only in October 2010/November 2010 when the market made as a high and after wards you all know what has happened. whether we would also make a top now and the market would move down only time would tell. The high levels in there indicators is a clear indicating the bulls are too strong now and are refusing to relent. So we have to wait patiently for market to reverse as the bulls as of now are appearing to be having too much strength as every fall would be bought into.
Positive for the market:
• Nifty has moved above 200 day EMA
• Market is above 200 week EMA.
• Daily MACD is in buy mode and moving up indicating the up move may continue.
• Weekly stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily stochastic is in buy move but in extremely overbought zone indicating that we might see a slight reversal in coming days.
• Daily RSI is moving into over bought zone above 75 which it went only during the highs of October/November 2010 and may/june 2009.
• 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.
Negatives
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

M. Sri Mahidar
Trend is Friend
Celebrate Life 
Sunday, February 12th 19.03 IST