Weekly technical Analysis for week ended 11^th April 2014

The market during the week was virtually in the same range of previous week even though the market has made a all time high. During the weeks also the market formed a weekly green candle indicating that the bulls were strong during the week also. The sentiments still continues to be in favor of the bulls. The Elliott wave is indicating that we might has completed that up trend and might move down in coming week/s. During my last updated I have indicated that the nifty is forming an expanding triangle and we are in the fifth of the fifth. It appears that the fifth of fifth has completed and might head down wards.

As can be seen from the above chart, it appears that we have completed all the fives waves of the expanding triangle and we can expect the market to drift down wards. Generally the fifth wave of the triangle should go and move above the A-C trend line and it has moved above it indicated by arrow. Now we have to wait for the A-C trend line to be violated to confirm the reversal. The A-C trend line is at 6650. So we have to wait for it to violate and move below 6650.

The Elliott wave break-up of the fifth wave of the expanding triangle is furnished above.It can be clearly seen that the fifty of the fifth has completed. The market has to move down now other wise if the fifth of fifth to split into its components then we can have fifty wave expansions and the market has to move up from current levels. So we have to keep close watch on the moves. If the five waves are completed the we can see market drifting towards 6650 first and then towards 4^th wave low which happens to be at 6432. Considering this we can see nifty falling around 300 points from current levels.

The above chart indicates that the market is rising in a channel and every time it touched the upper line the market fell towards the support line. Currently the market is exactly at the top resistance line giving an indication that the market has all the chances of moving down at-least for the short term. If it does not then we can has a blow-off rally which would actually not good for bulls in long term. Each and every technical pointer is pointing towards imminent correction but till the market confirms we should not act.

M.Sri Mahidar

Trend is Friend

13^th April 2014