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.
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
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