Weekly technical Analysis for week ended 7^th April 2012.

I am writing this update after nearly three weeks of absence. First of all I would like to say sorry for that. As I was travelling extensively on weekends I was not in a position to update on the same. But have been following the market closely. Technically nothing major change has happened. Now we would come to the market. This has been the truncated week for the market so nothing much seems to have happened during the week. During the previous weeks the market has taken support exactly at 200 day EMA, nifty moved below the 200 day EMA and thereafter moved above it which is a clear sign that long only investors (long term investors) are staying in the market and as providing support to the market. Till market is above it we can safely assume that bulls are strong and all the down side moves are bought into and falls would be shorter and the rise would be faster and would be longer than that of fall. So technically we should see for buying opportunity rather that the reverse. There seems to be nothing much change in the elliotte wave structure which I would discuss at the relevant section. Technically both daily and weekly charts are showing strength and I may not be surprised if the market moves up surprising everybody. One of the positive thing about the current down move is that it is on low volumes and also the re-tracement has taken more time which is clearly indicating that bulls are supporting the market and at present they are not surrendering to the bears. So till the situation reverses we can expect a decent up move. Also the weekly MACD is in buy mode and also the Daily MACD has give a buy signal which is a clear signal we have all chances of marching upwards from here. it may also be noted that nifty has exactly taken support at the sloping trend line which it has broken in January 2012 it is indicated in the chart below. And also the weekly chart also is showing some bullish sentiment. There is convergence of EMAs,50,100 and 15 week EMA. So we can see market moving in one direction in a big way when EMA diverge and the movement would be in the direction of divergence of EMA. So we have to closely watch the same.

it can be seen from the above chart that nifty has taken exactly support at the sloping trend line(red color) drawn from the high of November 2010. The point of contact is indicated by the blue elliptical figure.

Positive for the market:

· Nifty is above 200 day EMA

· Market is above 200 week EMA.

· 50 day EMA has moved above 100 day EMA which is a bullish signal

· Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.

· Daily MACD has given a buy signal.

· Daily stochastic oscillator is in buy mode but is at around overbought levels.

· Weekly stochastic oscillator has give a buy signal

· One of the big positive signal which has been generated is 50 week EMA has moved above 100 week EMA and also 15 week EMA has moved above all the three.

Negatives

· Monthly MACD is in sell mode indicating weakness in the market.

it can be seen from the above that the positive signs are slowely coming So the market would surprise us? We have to wait and see.

Elliott wave analysis:

I have indicated few weeks back that we might be in formation of an expanding triangle as a second was of the “C” wave of a flat. And it seems that the 5^th wave of the expanding triangle still seems not to be over and we can expect it moving up again. It seems that the fourth wave of the 5^th wave of the triangle is complete and we might have started the 5^th wave which has chances of moving near the 5600 levels. so we have to see whether market responds accordingly or not. the updated elliotte wave structure is given below in the chart.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Saturday, April 7^th 11.27 IST

Weekly technical Analysis for week ended 3rd March 2012.

Monday market opened with a scary mode falling a vertical fall and driving all the bulls away and from there on the next day reversal happened and market moved up but during the whole week it stayed in the range of the first day bar and it stayed below the low of the last week which is clearly indicating that the bears were having upper hand and they were successful in maintaining the market down. But bears bulls made their presence but they were not able to take the market up. So technically the bears are active now and we have to accept that. So in the coming weeks we can see the market with some down ward bias. During the week nifty has moved below the 15 day EMA which is also a sign on weakness at least for the short time. It may be also noted that during the week 5 day EMA has moved below the 15 day EMA which is also indication that market is weak at least for the short term. So till nifty moves above the 15 day EMA the bears would have upper hand and if it moves above it the bulls. So act accordingly.
Another one thing which has to be noted or seems to be ignored, I have indicated long back in October 2011 that we have broken the neck line of the heads and shoulders and have moved down for two months and there after recovered in January and we are all the way near the neck line and then we have started to move down so whether we have perfectly completed H&S pattern? Only time would tell the same so till the neck line is taken out we can only say that the market has all the chances of moving down. The same is indicated in the chart below by way of a blue circle.

 

Generally when market reverses after touching the H&S pattern neck line after the break of the same the fall would be more violent than that of the break of the neck line. So would the market fall very violently now or would again make an attempt to move above the neck line. We have the wait and see. One thing is sure if the neck line is not taken out we can surely expect the market to fall very very violently taking the market participants surprise. So keep a close watch on the neck line.

Now we have to see what the Elliott wave has to in store for us which is indicated in the relevant section.

Positive for the market:
• Nifty is above 200 day EMA
• Market is above 200 week EMA.
• 50 day EMA has moved above 100 day EMA which is a bullish signal
• Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.
Negatives
• 5 day EMA has moved below 15 day EMA and nifty is below 15 day EMA.
• Daily MACD has given a sell signal
• Daily stochastic oscillator is in sell mode and moving down indicating weakness in market.
• Weekly stochastic oscillator has give a sell signal and moving down indicating that we have chances of seeing the market down.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
It can be seen from the above there is absolute balance between positives and negatives so it clearly says that there is a fight between bulls and bears and who ever wins the market would move in that direction in a big way.

Elliotte wave Analysis:

Last week I have indicated that we are forming an expanding triangle as the wave-II and after which we might see the third wave developing. I have also indicated that we are in the fifth wave of the expanding triangle and after the end of the wave-5 of the triangle we would also complete the wave –II and we can see the market developing a wave-III which has all chances of taking the market to a new low. As of now for me the wave structure appears to be like this and I have to see whether any alternative exists or not. Which I still am not able to identify.  

I have given two alternatives for the fifth wave of the triangle and the alternative –I is given in red colour which is indicating the we might have completed the five wave up move of the fifith wave of the triangle and in this case the market should head down. But in the alternative –II we are in the fourth wave and after which market might move up probably towards 5600 with negative divergence and then has all chances of tanking. So what would happen only time would tell and we have to patiently wait for the market to indicate the same.

M. Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, March 4th 20.50 IST

Weekly technical Analysis for week ended 25th February 2012.

Nifty for the first time during this year has formed three continues red candles which is indicating the bears are at-least active for short time. One of the noticing feature of the current down movement is that it has broken the trend line drawn from the low of the January this year indicating the at-least for short term the market is weak and we can expect the market to move down. Nifty is exactly at 15 day EMA we have to see whether it would offer support or not if it does then we can see it moving up and testing or go near the top. If it does not we can expect the correction to be big which can take nifty to first 5373 and it is taken out we can see it moving towards 5212. So now we have to see whether 5373 would offer support or not. Another thing to be noted is that market has started to correct after all the technical oscillators are in extremely in over bought position which generally associated with larger correction. We have to see whether the same would be or not. Another noticing feature of this fall is that the volumes have increased substantially during the fall this is against the strength of the bulls.

Positive for the market:
• Nifty is above 200 day EMA
• Market is above 200 week EMA.
• 50 day EMA has moved above 100 day EMA which is a bullish signal
• Weekly stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily RSI is moving into over bought zone above 78 which it went only during the highs of October/November 2010 and may/june 2009.
• Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.
Negatives
• Daily MACD has given a sell signal
• Daily stochastic oscillator is in sell mode and moving down indicating weakness in market.
• Weekly stochastic oscillator has give a sell signal and moving down indicating that we have chances of seeing the market down.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

Elliott wave analysis:

I have analyzed EW and can analyze the best possible analysis at this point of time. I have arrived at the wave structure after much analysis and it appears that we have completed the wave –I of the five wave down and we not appear to be in the wave –II of the five wave down and after which we might start the third wave which should be destructive of the all are we coming near the top which might not be broken at-least for first six months of the current years. I am also working on other alternatives which I would furnish when it satisfies me. It appears that we have been forming wave-II in form of the an expanding triangle and it appears that we are in the fifth and final wave of the expanding triangle and after completion of the same we can expect the entire rise to be erased. we have to see the same whether it materializes. If the analysis is correct I have no doubt on this.


M.Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, February 26th 21.57 IST

Nifty Weekly Analysis

Weekly technical Analysis for week ended 18th February 2012.
What a journey for nifty. It has been rising continually for last 7 weeks longest in last five years. one of the noticing features is that low of the succeeding week has never gone below the low of the previous weeks low which is indicating a very bullishness in the market. But technically it seems that the rise has too much and major oscillators have been in an overbought zone for last three weeks. I have indicated that over bought zone of the oscillators indicates extreme bullishness of the trend and we can continue over bought till it reverses so we should not short just because the indicators have gone into over bought zone. We have to wait for the price to confirm reversal till then have patience as I always say price is king. If we go by Fibonacci time periods we have completed 8 weeks of rise from the low of 4521 which consisted of 7 continues weeks of rise. So we have completed a Fibonacci time period and we have chances of correcting considering the completion of the frame. Another noticing feature of the current move is that nifty has retraced 61.80% of the fall from November 2010 in just 8 weeks and it has just reversed from after touching 61.8% retracement level. As the market is in extremely over bought position we can expect correction in coming week as the 61.8 retracement is here. Market might pause for some time and then make an attempt to move above 61.8% retracement. As the movement above it would market a significant event as then it would make an attempt at making a new high. But that event is far away and we would not talk about it now. one of the noticing features which I have noticed is that nifty has not moved below 5 day EMA in the entire rise and now we have to wait for it to close below 5 day EMA to expect a downward movement in the market till then it would always try to move up. 15 day EMA is at 5350 so we can expect market to move to 15 day EMA if any correction happens which happens to be 200 points from current levels. the 200 day EMA is also stationed at 5163 so till that is taken out we can safely assume that all the down movements would be bought into. One of the strongest thing about the market is that on weekly charts market has formed a higher high which is a very bullish signal and we have to wait for the same to reverse till the lower low is formed so as to start a down trend.
It can be seen from the chart that we are in formation of an expanding triangle and we are in formation of the 5th wave of the expanding triangle( as shown in the chart below) from last five months and its still seems that we have still not completed that fifth wave and we are in completion of the 3rd of the fifth and after which fourth would come and fifth would be formed after which we can see market correcting towards 5200 levels.
The current move has resulted in correcting the total wave count from the high of November 2010 and its not properly fitting into the proper count so I am not so confident of the count and it seems I have to see for in-depth analysis of EW count to arrive at the probable count so that we can proceed on the same. one thing is sure we might have surely completed a significant wave at around 4500 as market has reversed nearly 61.80% of the total fall so I have to rework and I have tried alternately and as of now none of them are fitting properly it seems I have to properly analysis the EW and then arrive at wave count. So I would furnish the same as soon I am able to arrive at the count.

Positive for the market:
• Nifty has moved above 200 day EMA
• Market is above 200 week EMA.
• 50 day EMA has moved above 100 day EMA which is a bullish signal
• Daily MACD is in buy mode and moving up indicating the up move may continue.
• Weekly stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily stochastic is in buy move but in extremely overbought zone indicating that we might see a slight reversal in coming days.
• Daily RSI is moving into over bought zone above 78 which it went only during the highs of October/November 2010 and may/june 2009.
• Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.
Negatives
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.
M.Sri Mahidar
Trend is Friend
Celebrate Life
Sunday, February 19th 20.03 IST

Weekly technical Analysis for week ended 11th February 2012.
The movement of the market during last one month might have surprised even the hardest of the bulls and bears were bruised the most. Everybody is surprised by the present move and majority of the players have missed the rally they are really waiting for the market to correct slightly so that they can enter into the market and they are doubting whether they can get that opportunity or not or the market would go all the way to make a new high. Now comes the question whether we are into the new bull market and whether we would make a new high. As per my analysis we are far away from that. In my view its still a corrective rally at the end of which we might see a very big correction. But one thing to say don’t ignore the trend as it is what market the market and you can make money only by following the trend and not going against the trend. But as far as my Elliott wave analysis goes it is giving an indicating that we are just in an uptrend is a major down trend and once the up trend is over we might see the market going down very viciously. Whether this would happen I don’t know but my analysis tells that and we have to be patience as time would tell the difference. Now we come to the market as of now. The market is showing considerable strength and bulls are trying all the means to decimate bears and whether they would be successful? They have been successful till now. So what are the things which are indicating strength of the markets? The market is trading above 200 day EMA which is clearly the strength as bulls survive above it and bears below it. Another strong indication is it has broken the trend line drawn from the high of November 2010 which is a very strong indication. nifty has also formed a higher high after a long time which clearly indicates that bulls are strong. Now we have to see whether we make a higher low or not. If we continue to make the same then we can see the market moving up.

It can be seen from the above chart that market has broken the trend line drawn from the high of November 2010 indicating strength. Also not the very high levels of RSI and MACD indicated by arrows. These two indicators are at those high levels last time only in October 2010/November 2010 when the market made as a high and after wards you all know what has happened. whether we would also make a top now and the market would move down only time would tell. The high levels in there indicators is a clear indicating the bulls are too strong now and are refusing to relent. So we have to wait patiently for market to reverse as the bulls as of now are appearing to be having too much strength as every fall would be bought into.
Positive for the market:
• Nifty has moved above 200 day EMA
• Market is above 200 week EMA.
• Daily MACD is in buy mode and moving up indicating the up move may continue.
• Weekly stochastic oscillator is in buy mode and is about to give a sell signal.
• Daily stochastic is in buy move but in extremely overbought zone indicating that we might see a slight reversal in coming days.
• Daily RSI is moving into over bought zone above 75 which it went only during the highs of October/November 2010 and may/june 2009.
• Weekly MACD has give a buy signal indicating that we might see up move to continue for some time. it can only be reversed abruptly only when market falls heavily.
Negatives
• 50 day EMA is below 100 day EMA is below 200 day EMA indicating extreme weakness.
• Monthly MACD is in sell mode indicating weakness in the market.
• 15 week EMA is below 50 week and 100 week EMA.

M. Sri Mahidar
Trend is Friend
Celebrate Life 
Sunday, February 12th 19.03 IST