Has gold topped out. it appears to be so technically. it can be seen from the chart-i above which is of weekly time frame has broken the trend line from the low of 2008 i.e. nearly three years trend line. As the trend line is for long period the correction which started would be of longer time wise and price wise. You can also see in the second chart which is of daily chart it has formed a triangle and has broken down indicating that it might has topped out. the pattern is exactly similar to that formed in nifty in january 2008 where in nifty has broken down and you know what has happed there after. so we can expect a larget correction in gold probably towards 1000 levels. so be prepared for the same.

Nifty Weekly Update

Weekly technical Analysis for week ended 12th February 2011.
Nifty has opened on a weak note and has continued to slide throughout the week and recovered in the last half on Friday. One of the noticing features of this week’s movement is that nifty was making low each day including Friday and also closing at lower than the previous day except on Friday which moved above the previous days high indicating that bulls are trying to regain the lost ground. The closing on Friday in indicating some strength this has to be confirmed by nifty not moving below the Fridays low and also closing above the high of Friday. So we have to see whether the up move is only the short covering or genuine buying which is happening. So the Mondays close would somehow confirm the strength of the bulls at-least for the short term. So keep a close watch on Monday.
This week also market has been continuing to move away from 200 day EMA, this is the third continues week that the market is closing below 200 day EMA indicating extreme weakness and also indicating that long term funds are not supporting the market. So till 200 day EMA is taken over bulls cannot be sure of any recovery. Last week in have indicated that 50 day EMA has moved below 100 day EMA indicating extreme weakness and this week also 50 day EMA has further moved down below 100 day EMA clearly indicating that bears have come into the market and every rise would be met with heavy selling. This is the first time that market has moved blow 200 day EMA after long time, it might an effort to conquer 200 day EMA, and we have to see whether 200 day EMA would offer good amount of resistance or not, usually it would offer huge resistance. If the market moves up and 200 day EMA offers resistance then it would offer good shorting opportunity with stop loss at that price so be watch full of markets any attempt to conquer 200 day EMA.
Negatives for the market:
· Nifty has moved below 200 day EMA.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Monthly MACD has given a sell signal indicating extreme weakness in the market.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· Daily and weekly MACD is in sell mode indicating further weakness.
· Weekly stochastic oscillator is in sell mode and is moving down indicating that every rise would be sold into.
· The deadly cross of 50 day EMA moving blow 100 day EMA has happened which is clearly indicating extreme weakness.
Positives developing:
· Daily MACD is in oversold position and is trying to give buy signal.
· Daily and weekly stochastic oscillators as in extremely oversold positions. Daily stochastic oscillators has give a buy signal and weekly oscillator is about to give a buy signal giving an indication that market might make an attempt to move up, but weekly and monthly indicators are in sell mode every rises would be sold into so be careful of any recovery.

Wolf Wave:

Two weeks back i have indicated that wolf wave has confirmed and we have a target of around 3500 and we have to see whether the same is achieved or not. Historically it has been seen that the success rate of wolf wave is very high around 85-90%, and virtually the targets are met after confirmation of the same. So we have to see whether the same is achieved or not.
Elliott wave analysis:

I have indicated nearly at the end of December that if the alternative –II is correct then we have chances of seeing around 5300-5200. And see we nifty has made a low of 5177 and thereafter recovered very fast. Does that mean that we have formed a short term bottom? The answer seems to be “NO” as per Elliott wave it can be clearly seen in the above chart we might have completed the third of third and we might has just started to move up by way of wave four and there after wave-5 would start which would take the nifty below 5177 again towards 5000 levels. so not the obvious question is to what extent the wave-4 can move up it appears that it can move up to 5550 levels and in any case not above 5700. So wait and watch whether this one begins to form. If it doesn’t happen then I have to see for another alternative which I would give only when the above doesn’t happen.
Pivot Point Analysis:
As per pivot point analysis, yearly Pivot is at 5716 and it is clearly gives an indication that nifty is blow the yearly pivot and which is a bearish indication and till it is below it, it has chances of moving towards s1 and s2. S1 is placed at 5093 and s2 is placed at 4053 so till nifty stays below the pivot of 5716 we can see nifty drifting towards 5093 and 4093. So now currently 5093 should offer support to the market so watch out for market to move to these levels. Nifty seems to have reached nearly 100 points away from 5093
M.Sri Mahidar
Trend is Friend.
Sunday, February 13th 22.09 IST

Alternative-II

under this alternative, we are in completion of or has compleated 3rd wave and after that we might see up move of Wave-IV of wave-III and after that we might see wave-V of wave-III which would end the wave -III after which we might see a swift rise of wave-IV and then wave-V. so as per this we are near the end of the wave-III. we have to see for swift rise indicating that the down trend is over till that time the down move would sustain.

M.Sri Mahidar

Trend is Friend.

To day i would be giving the two alternatives.


Alternative -I

Under this alternative the details of the wave break up is given in the chart above. as per this we are still in the third wave of third wave and in that also we are in the third wave. As per this still we have some distance to go till it completes the wave and which has all possible chances of seeing 5000 or sub-5000 levels also. we have to see whether we are forming this alternative.

M.Sri Mahidar

Trend is Friend.

Weekly technical Analysis for week ended 5th February 2011.
Nifty this week has indicated indecisiveness except on Friday where in it has indicated and broke the good support at around 5400. During the entire week nifty was stuck between 5400 and 5550 and frustrated the traders or investors and on Friday suddenly from opening strongly to collapsing by the end of the day. The closing of the nifty on Friday was indicating extreme weakness. The close of nifty below 5400 is an extremely weak indication and it clearly indicates that bears have become strong in the market and further down ward movements are also not ruled out. the break of 5400 is a extremely weak sign. Currently we can expect nifty drifting towards 5200 levels.
Last week I have indicated that nifty has moved below 200 day EMA and this week also it stayed below it indicating the funds are not supporting the market and that also indicating the long term funds are just moving out of the market. One of the strong indicators of weakness is that this week it did not even make an attempt to conquer 200 day EMA which clearly is an indication that bulls are not interested in taking the market towards the EMA. The ease at which market broke below 200 day EMA is an indicating of extreme weakness in the market. So unless and other wise nifty makes an attempt to conquer the 200 day EMA bulls cannot hope any better days and all rises should be sold into. There are two important technical events that have taken place which are pointing towards extreme weakness. This week on monthly chart MACD has given a sell signal this is the first time after March 2009 that on monthly chart that MACD has given a sell signal. Another indicating is the deadly cross of 50 day EMA below 100 day EMA. Generally cross of 50 day EMA below 100 day EMA is considered at deadly cross as it is an indication of extreme weakness in the market or stock. This bearish cross has happened for the first time after april 2009 which is clearly indicating further weakness in the market and also bulls are active in the market and it would take hell lot of effort for the bulls to take control of the market. All these technicals are indicating that at present every rise has to be sold into and not buying to be done till the trend turns up and the same would be indicated by the market in the course of time and we can either be short on the market or just wait in the side lines.
Negatives for the market:
· Nifty has moved below 200 day EMA.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Monthly MACD has given a sell signal indicating extreme weakness in the market.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· It has closed above 50 day EMA indicating strength for the bulls.
· Daily and weekly MACD is in sell mode indicating further weakness.
· Weekly stochastic oscillator is in sell mode and is moving down indicating that every rise would be sold into.
· The deadly cross of 50 day EMA moving blow 100 day EMA has happened which is clearly indicating extreme weakness.
Wolf Wave: last week in have indicated that wolf wave has confirmed and we have a target of around 3500 and we have to see whether the same is achieved or not. Historically it has been seen that the success rate of wolf wave is very high around 85-90%, and virtually the targets are met after confirmation of the same. so we have to see whether the same is achieved or not.
Elliott wave analysis:

The option –II which I have given nearly one and half months has been proved correct and I have indicated that we can see 5200 if metarialises. And we are nearly 200 points from those levels. EW has clearly pointed the target when every thing else was not clear. Now we come to the wave count and the probable targets the red one are clearly indicating that wave structure in all their internal structures. It seems the wave-I is from around 6350 levels to around 5690 a fall of points 660 points and then the wave -2 was a flat and it rose from 5690 to 6178 a rise of 488 points which is nearly 73% of the fall of wave-I which is near the Fibonacci after that the third wave has started to form. Generally the wave-III would be the longest one except the market proves otherwise. If wave-III is to be longest then it would be nearly (at least) 1.618% of the length of wave-I. So the length of wave-III can be of 1067 points so the market should fall around 1067 points from 6178 so the target comes to around 5100 levels. we have to see whether the same is achieved or not. I have no doubt about the market moving there. The extention of the wave-III is proved as the wave-III is breaking into its components. When wave-III is extended then as per the internal structure wave-iii of larger wave-III would also extend and as per this assumption we have still some room left for the market to go down as the wave structure is not yet completed. So market would not make a strong come back till the entire wave structure is complete. It appears that it might complete around 5100-5200 levels so we have still nearly 300 points to move down before market makes a strong come back to form a wave-2. So till that time bears would rule the world. If the market reaches levels of 5150 levels then we have to be carefull as market might make a swift up move so just watch the market for further down sides.
Pivot Point Analysis:
As per pivot point analysis, yearly Pivot is at 5716 and it is clearly gives an indication that nifty is blow the yearly pivot and which is a bearish indication and till it is below it, it has chances of moving towards s1 and s2. S1 is placed at 5093 and s2 is placed at 4053 so till nifty stays below the pivot of 5716 we can see nifty drifting towards 5093 and 4093. So now currently 5093 should offer support to the market so watch out for market to move to these levels.
M.Sri Mahidar
Trend is Friend.
Sunday, February 6th 21.53 IST

Weekly technical Analysis for week ended 16th January 2011.
Nifty opened on a weak note and continued to be weak for the entire week and the closing was near the low of the week which is clearly indicating that bulls have lost ground and bears are continuing to strangle bulls. It appears that bears are having upper hand and it appears that it might continue it to some time to come. There are so many technical events which are happing and which are pointing towards the probable top of the market has already in place and we might have started down trend which might last for long time that what has been seen in last 22 months. So if new high is not made in the coming month or two then it would confirm that top has been formed. It has not indicating that formation of top but confirmation of the same is pending. So we have to wait for confirmation of the same. One of the important technical events that have taken place during the last two weeks is worth noting and are indicating towards probable top is already in place. Nifty has for the first time in last 22 months has formed a lower high and is followed by lower low which is clearly indicating that we might have topped out. Till now in this bulls market we have not formed a lower low and this time we have formed the same indicating that the trend might have turned down. Another important technical event which is pointing towards further weakness is that nifty has moved below 50 day EMA and also 100 day EMA and is finding resistance at 100 day EMA which is pointing towards weakness. Nifty is not exactly placed at 200 day EMA and we have to see whether long term funds would offer support to the market if not then we can assumed that up trend is certainly over. From April 2009 onwards markets have not closed below the 200 day EMA on weekly basis we have to see whether we would see the phenomenon now. The break of the 200 day EMA on weekly basis does clearly point towards probable top and also long term funds are not offering support to the market and further down sides are not ruled out.So the next one to two weeks are going to be crucial as the market is going to give a crucial support or a break down.
I have been pointing towards market topping in January from last so many months and is appears that this time also market has turned down in January. I have been indicating from so many months that market has been raising for 21 months and after completion of the same the market has all the possible chances of falling/reversing the trend and the market has exactly turned after completion of 21 months( where 21 appears to be a Fibonacci). Another historical thing which is prudent to note at this point of time is that when ever market has rise for 21 months or so it has corrected by nearly 70% of the total rise or of that wave. In the present case the market has risen from 2539 to a high of 6338 a rise of around 3800 points so as per this time analysis we have to correct around 70% of the 3800 so a fall of at-least 2660 points from the top of 6338 so the target comes to around 3678 for nifty so considering this nifty should fall by another 2000 points. So be prepared for the fall and don’t say that you have not been warned.
The below chart is clearly indicating formation of lower low and also lower high shown by blue arrows. This is indicating that trend might have turned down so till higher high and higher low is formed the trend would be down. It can also be seen in the chart that nifty is exactly at 200 day EMA ( indicated by blue MA).

Positives for the market:

· Nifty is above 200 day EMA
· Daily stochastic oscillator is in oversold position and is about to turn up.
Negatives for the market:
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Nifty is below 15 day EMA, 50 day EMA, 100 day EMA
· It has closed above 50 day EMA indicating strength for the bulls.
· Daily and weekly MACD is in sell mode indicating further weakness.
· Weekly stochastic oscillator is in sell mode and is moving down indicating that every rise would be sold into.
Elliott wave analysis:
I have provided two alternative in my previous update a and it appears that the first one has proved right in this I have indicated that we might have see a rise up to 6200 levels and then we might move down and has chances of seeing 5200 levels and exactly as per this nifty has made a high of 6181 and thereafter started to move down and not placed at around 5650 and we have to see whether 5200 is achieved or not.
M.Sri Mahidar
Trend is Friend.
Sunday, January, 16th 16:20 IST