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
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Sunday, February 26th 21.57 IST