Weekly technical Analysis for week ended
8th March 2014
Markets during the week have risen phenomenally; it closed at all time high. What is to be noted is that the ease at which it has gone above the all time high. Nifty has never closed above 6400, during last one year it tried to move past the 2008 high and every time it went near or gone past it, nifty has corrected heavily. This time also in December it went there and then started the move down. But this time it moved past this level with ease and very strongly and with huge volumes indicating that we might have just gone above the formidable resistance level and in my view any new high has to be respected which indicates clearly that the bulls have decimated bears and are ready to take market to a new high. So we have to respect the new high whatever may be the state of the market/economy. Large part of the move is contributed by the banking stocks and also Reliance which has risen nearly Rs.50 on single day which is a rarity for reliance. I have seen over the years that when ever reliance move it takes market with it so, se have to see how far the it can take the market.
It can be seen from the above
chart that the range break out has happened and we a move has happened. It can
also be seen from the chart that we are forming an expanding triangle (the
pattern might change as the time progresses), and we are in the fifth wave of
the pattern. Generally the in case of expanding triangle pattern the fifth wave
would be the longest and also the most swift and the most violent wave and the
volumes would also be very high during the formation of fifth wave giving the
indication if trend reversal, already it is the longest wave as of now. So now
comes what is the target for the fifth wave? Generally it goes and moves above
the AC trend line; this gives an indication that we might still have some
upsides for the market.
9th of September 2014
Markets during the week have risen phenomenally; it closed at all time high. What is to be noted is that the ease at which it has gone above the all time high. Nifty has never closed above 6400, during last one year it tried to move past the 2008 high and every time it went near or gone past it, nifty has corrected heavily. This time also in December it went there and then started the move down. But this time it moved past this level with ease and very strongly and with huge volumes indicating that we might have just gone above the formidable resistance level and in my view any new high has to be respected which indicates clearly that the bulls have decimated bears and are ready to take market to a new high. So we have to respect the new high whatever may be the state of the market/economy. Large part of the move is contributed by the banking stocks and also Reliance which has risen nearly Rs.50 on single day which is a rarity for reliance. I have seen over the years that when ever reliance move it takes market with it so, se have to see how far the it can take the market.
During my previous update I have
indicated that we are moving in a trading range between 100 day EMA and 200 day
EMA and any move on either side would result in a big move. And it has moved
above the 100 day EMA and we can see the move after that as the trading range
of nearly two months was broken. The extent of move of the market has surprised
even the strongest bulls. Now we have to see what the patterns the market is
forming and what the probable upsides for the market are?
In the daily chart market seems
to be forming a expanding triangle and now it appears that we might be moving
up in the fifth wave as per the current structure, as of now the structure is
not clear but as of now it is the probable structure.
M.Sri Mahidar
Trend is Friend9th of September 2014
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