Weekly technical Analysis for week ended 15^th February 2014

Nifty during the week was in a very very tight range and on Thursday it broke the tight range and corrected heavily but on Friday again late before just close the market recovered and closed in green. Technically it appears that the up move is not convincing and it appears that it might not sustain for long and we have all chances of market falling in the coming week, whether it would start in the coming week only or in coming weeks only time would tell.

Market seems to be stuck in a narrow range, during the last two weeks, i.e during the month of february the market is stuck between two EMA, 100 day EMA and 200 day EMA. 100 day EMA is offering resistance and 200 day EMA is offering support, break of any of there resistance is a sign of trend in that direction. Currently 100 day EMA is at 6105 and 200 day EMA is at 5981, so we have a range of only 120 points, which is very very short. So market has to be closely watched at these levels. One of the positive things for bulls is that market is finding support at 200 day EMA, as bulls rule above 200 day EMA and bears below that. Any move below 200 day EMA whuld be a sign of genuine weakness and bears would pounce of bulls and bulls would have no whare to run. So Has patience and wait for the market to break below the 200 day EMA to initiate any short position till then its better to be in side lines as the market is in very tight range.

 

In the above chart, we can clearly see the market stuck between 100 day EMA and 200 Day EMA.

Elliott weve analysis:

The elliott wave analysis of the nifty is give here under, it appears that we are in the 3^rd wave of the fall. Even thoug the wave structure is not clear it appears that the 3^rd wave is splitting into its components and we are into the 3^rd of the 3^rd of the 3^rd wave. As of now the structure is not clear, but would furnish as it progresses. We have to see this structure is true or not but as of now it’s the thing which is appearing to me. It can lead to other structure , which we would come to know only when the structure unfolds. There are two optioins which are indicated in the chart below, and under the two options the market has all chances of moving down.

Wait for the market to un fold itself.

M.Sri Mahidar

Trend is Friend

February 16^th 2014