Weekly technical Analysis for week ended 11^th May 2013

All of you might be wondering that I am a perennial bear, as I have been projecting the bear phase from long. But that is not the case I have been constantly saying that whatever might be the case the price is the king and the price as per chart is indicating the upside for the market and it has been making highs. As has been pointed out in the last weeks update, I have indicated that as per the time lines which we apply while arriving at the trend whether up or down are pointing not a good story for the bulls in medium term as the retracement time is more that the time it has taken to fall. This is clearly pointing out that even though the market is moving up it does not have strength as it is taking more time to retrace the fall. All this is pointing out towards a imminent fall which would formalize over the period of time. When it would take place only market would indicated but the final fall has to come and when it comes it should be more devastating than that we have seen in recent times. We have to wait patiently for that. Till that time as I always point out what ever be the indication of the market price is the king and it would always enable to be with the market either up or down. As of now it is pointing towards moving up and is moving up so we have to be with that even though the price patterns are indicating that we might be nearing the top so till the market reverses we have to be long with tight stop loss.

Today I would be indicting or explaining the Demark indicator developed by the Thomas indicator, it is on of the powerful pattern as it takes into account only the price only and not any other. its not like any other indicator, it is not indicated or derived from the price it is price only. there are some sequence of prices and some rules for the same and when the price matures it clearly indicates reversal. But in this case also we have to wait for the price to reverse and then take reverse position.

As per this indicator we have completed TD sell set up meaning that we are in for a sell signal and we have clearly completed that pattern both in Bank nifty and also nifty. Whenever there is co-relation between these two indicators that we can hope for a powerful reversal. The patterns have been completed in monthly charts over a period of 5 year which would be a powerful signal for the market. As its spread over five years I am sure that we are somewhere near major top and when ever it reverses we can hope for a very devastating fall which would take all the market participants by surprise I am pointing towards a medium term trend not the immediate trend. So brace for market to fall over period of six to 12 months. And once that happens we can expect a powerful bull market which should last for years to come.

The first chart is that of nifty and the second chart is that of bank nifty. Both these indicators have completed the pattern and now once they close below the 13^th bar we can hope for a reversal and expect the market to go down very fast.  Banks nifty should move below 11800 and nifty should move below 5930 then only the pattern would confirm the reversal till that time we have to be either long or stay away from the market. In nifty we can place stop loss order at 6200 and bank-nifty at 13200. As the patterns have formed over a period of 5 years I am giving weightage to the pattern. Even on daily basis I have applied that same for last one year and every time I have benefited a lot and only its failed for one time and in that stop loss was taken out and saved my capital.

 

 

M.Sri Mahidar

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Sunday 12^th May 2013 time 11.53