Weekly technical Analysis for week ended 14^th March 2014

The market during the week, was on a close range, it has opened on a positive note there after was in a range then fell on Thursday but recovered the loss on Friday, all in all in a close range. In the weekly charts the market has formed a doji indicating that the bulls and bears were no able to decide the direction of the market. So the coming week is going to decide on the direction of the market. So technically nothing has happened to the market compared what we have discussed in last week. One thing is to be noted is that the market was able to sustain above the all time high for the entire one week which is a positive sign for bulls in the coming week. The longer the market stays in all time high region bulls would be happy with the same.

We would see the time of retracement to see whether the time signifies the strength of the bulls. We would see the shorter time frame and also larger time frames to see, what the time lines say about the market.

First we see the shorter time frame for last two years.

The above chart is the weekly chart of nifty for the last two years. It can be seen from the chart above that all the falls of the last two years are being retraced in shorter period of time, and each fall was taking longer time to fall but unable to go below the previous low. During the entire period the market has fallen and the recovery was around 50% of the tme.All this is indicating that all during the last two years bulls were showing strength and bears were unable to take the market below their previous lows which was a clear sign of bullishness which everyone has missed. So till there is faster retracement of the fall the trend is not reversed in short term also. So till that event happens we can be sure that the trend has not reversed.

Now we would see for longer time frame

 In Last three years from  November 2010 high.

It can be seen from the chart that the fall from November 2010 to December 2011 fall was in 60 weeks and the same was recovered from December 2011low to high of December 2013 high took nearly 106 weeks which is nearly 180% of the time taken to fall. I you see from longer period from January 2008 highs the fall of 2008 took 62 weeks to fall from 6354 to low of around 2500 and it has taken  nearly 254 weeks to recover the entire rise, the recovery has taken nearly 4 times the time.  As Per the Elliott wave the last wave of the larger wave should e recovered in shorter period to signify the trend reversal but till not that has not happened so it appears that the larger trend is down but there is uptrend in shorted term so we have to enjoy with bulls till the trend reverses in shorter time period till that time bulls would rule.

M.Sri Mahidar

Trend is Friend

16^th of March 2014