Weekly technical Analysis for week ended 27^th September 2014

This week nifty opened on slightly positive note and there after bears dominated the market for three days (thanks to supreme court ruling on coal blocks) post which on Friday bulls regained some ground thanks to S&P upgrading. Nifty opened at 8084 made a high of 8159 made a low of 7841 and finally closed at 7968. For the current week it has made a red candle indicating that bears have somewhat gained upper hand during the week. During this week nifty has move below 20 day EMA took support at 50 day EMA(7838) and started to move up. For last three days it has closed below 20 day EMA which indicates that bears are trying hard to take the market down. Market is not appears to be oscillating between 20 day EMA (8011) and 50 day EMA(7838). So as of not 50 day EMA is acting as support and 20 day EMA is providing resistance. We have to see whether nifty would successfully move above 20 day EMA which it has done in the past whenever it moved below it. if it 20 day EMA offers resistance the it would again turn towards the 50 day EMA which if taken out has all chances of nifty moving towards 100 day EMA at 7616. So we have to keep a close watch at all these levels as selling pressure might come as resistance and buying pressure might be coming at the support levels, which might give buying and selling opportunities to the traders. 

 

One bearish pattern which was confirmed during the current week was the Wolf wave formation. it has formed and last week it has broken below the 1-3 trend line moved above it and this week it has again moved above it and again moved below it and closed below it which confirms the pattern. Nifty has to move above the 1-3 trend line indicated by green arrow in the above chart and if not we have all the possible chances of nifty moving towards the red arrow which happens to be around 7150 levels. So till it’s below the neck line we can expect the market to slowly drift towards the red arrow. We have to see what happens in the coming week.

 

Elliott wave analysis:

I have indicated that nifty has support at 7855 and this week nifty has just taken support at that levels and bounced with vengeance. With this min retracement has completed. It this is taken out then we have all possible chances of it moving towards 7540 which the low of wave-2. If now we can assume that on Friday the wave-2 of wave-3 of larger wave-5 has completed and we might head towards 8400-500 levels. Still it is not confirmed we have to wait for confirmation in the coming weeks.

  

M.Mahiidar

Enjoying Life

Trend is Friend.
28th September 2014 time:16.50 IST