Weekly technical Analysis for week ended 11^th May 2013

All of you might be wondering that I am a perennial bear, as I have been projecting the bear phase from long. But that is not the case I have been constantly saying that whatever might be the case the price is the king and the price as per chart is indicating the upside for the market and it has been making highs. As has been pointed out in the last weeks update, I have indicated that as per the time lines which we apply while arriving at the trend whether up or down are pointing not a good story for the bulls in medium term as the retracement time is more that the time it has taken to fall. This is clearly pointing out that even though the market is moving up it does not have strength as it is taking more time to retrace the fall. All this is pointing out towards a imminent fall which would formalize over the period of time. When it would take place only market would indicated but the final fall has to come and when it comes it should be more devastating than that we have seen in recent times. We have to wait patiently for that. Till that time as I always point out what ever be the indication of the market price is the king and it would always enable to be with the market either up or down. As of now it is pointing towards moving up and is moving up so we have to be with that even though the price patterns are indicating that we might be nearing the top so till the market reverses we have to be long with tight stop loss.

Today I would be indicting or explaining the Demark indicator developed by the Thomas indicator, it is on of the powerful pattern as it takes into account only the price only and not any other. its not like any other indicator, it is not indicated or derived from the price it is price only. there are some sequence of prices and some rules for the same and when the price matures it clearly indicates reversal. But in this case also we have to wait for the price to reverse and then take reverse position.

As per this indicator we have completed TD sell set up meaning that we are in for a sell signal and we have clearly completed that pattern both in Bank nifty and also nifty. Whenever there is co-relation between these two indicators that we can hope for a powerful reversal. The patterns have been completed in monthly charts over a period of 5 year which would be a powerful signal for the market. As its spread over five years I am sure that we are somewhere near major top and when ever it reverses we can hope for a very devastating fall which would take all the market participants by surprise I am pointing towards a medium term trend not the immediate trend. So brace for market to fall over period of six to 12 months. And once that happens we can expect a powerful bull market which should last for years to come.

The first chart is that of nifty and the second chart is that of bank nifty. Both these indicators have completed the pattern and now once they close below the 13^th bar we can hope for a reversal and expect the market to go down very fast.  Banks nifty should move below 11800 and nifty should move below 5930 then only the pattern would confirm the reversal till that time we have to be either long or stay away from the market. In nifty we can place stop loss order at 6200 and bank-nifty at 13200. As the patterns have formed over a period of 5 years I am giving weightage to the pattern. Even on daily basis I have applied that same for last one year and every time I have benefited a lot and only its failed for one time and in that stop loss was taken out and saved my capital.

 

 

M.Sri Mahidar

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Sunday 12^th May 2013 time 11.53

nifty weekly update for 28th April 2013

Weekly technical Analysis for week ended 27^th April 2012

I am writing this weekly update after a long time, as I have myself decided to stay away from the market updates and now I have decided to follow the market.

During the period which I was away from the market (I was closely following the same) nothing much seems to have happened market is nearly as the same levels as on that time. During the week which was truncated week the market opened on a strong note and started to moved up and continued to move up. This week was also the derivatives settlement weak, so in the coming weak we might see a move but the coming weak also have big event of RBI credit policy and market might not do much till that event happens. But we have to discuss technical right.

Now the question comes whether the up move from the January 2012 is a bull market or a up move in the bear market. that market has taken 59 weeks from the high of 6335 in November 2012 to the December 2011 low of 4531. From there on the market is moving in a up move and currently it has completed 70 weeks and would be entering 71 weeks and we are nearly 10% from the top so the retracement( up move) has taken 20% more that the fall and we are still far away from the high. So considering this the up move cannot be considered as a bull market up move. To be a bull market the last was should be retraced in 50-60% of the time to be power full even if its just equal it better but currently the time period is far more that that is comfortable for the bulls. So when ever the down move comes it would be very violent.  Will that happen or not we have to wait and watch. The market is maintaining above 200 day EMA so bulls are still favor of up move of the market and long term investors are still in the market.

  

The above chart is a weekly chart and the fall took 59 weeks and the rise has till now into 71 weeks and we are still far away from the top.

If you apply the longer time frame from the high of January 2008 the market has fallen from January 2008 of 6354 to a low of around 2250 in October 2008 in nearly 43 weeks( or nearly 10 months) and now nearly 4 and half years have completed so we have completed nearly 54 months and till now we are far away from the top and in this period we were not able to move above the high. So we have nearly completed 5 times the time period and still not able to move above the high. So still I can say that we are still not in a bull market all these are uptrends in the bear market and it appears that till the final fall happens we might not be seeing a change is sentiment. The up moves are only a relief rallies.

I have given the time period elements in this weeks update and I would be providing the Elliott wave updates from the next week onwards or during the week.

M.Sri Mahidar

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Sunday 28^th April 2013 time 20.34

 nifty and bank nifty both have compleated TD sequential sell set up which is one of the powerfull reversal indicator. on completion of 13 this gives a sell indication. and as per this method we should see the market moving down very swiftly and we can see these markets moving towards the TD support line which are nearly at around 10% from current levels. so we should see the markets moving very swiftly downwards surprising every body. so if any body is expecting 6000+ in nifty in one to two months then as per this it might not happen. But there is one catch in it, this pattern can be negated only and only if it moves above the 13th bar indicated in the two charts. so if the high of the bar 13 plus filter is taken out then we can assume that the pattern has been negated. So now the questin comes what would be the price the movement above which we can assume the negation of this pattern. if BNF closes above 11920 and nifty if closes above 5850 then we can assume that the TD sequential sell has been negated. so brace for the fall in comming weeks.

M.Sri Mahidar
Trend is Friend
Celebrate Life

last week i have written the weekly update but did not post in blog which i am posting now.
Weekly technical Analysis for week ended 23^rd   September 2012.

i am writing this update after a long time nearly two months, during these periods the market was boring in a tight range with sectors only moving up, I also took some time off from the market but following the indices closely till something remarkable happens and now so many thing have happened both technically and fundamentally during the last one week to 10 days which has prompted me to update my weekly update and look into the market in detail. I would be now continually updating about the market.

Now we see what the market has done, during the last 10 days bulls have virtually decimated the bears and suddenly from no where immense optimism has come to the market and now everybody seems to be talking about the market and its movement. So what the charts are indicating technically. Although I have been bearish on the market for more than one and half years, I respect price and if its moving up then what ever may be your study you should just follow it as that would only lead you to success in the market. in the current situation the market is bent on moving up and we should respect that sentiment and act accordingly rather that going against the trend.

On a weekly charts it has been an fantastic range stuck between 200 day MA and 100 day MA. Market has been finding support at the 200 day MA around around 4700-800 levels and resistance at around 5400 levels which happens to be 100 day MA. The market has been stuck between these two for nearly one year  and this week it was successfully able to move out of the range on the upside on the basis of positive news at both global level and also domestic levels. This range I have indicated long back and also have indicated that once this range is taken out then we can see market move on larger scale the side of the break. This time the break has upper side and bulls have won the race and now as the break out has happen for bulls now bulls should take the market up if they show any weakness then bears would pounce and it would be end game for bulls. Now we can hope the market moves on the upsides.  If it fails and to move and again moves into the range of last one year then it would give victory for bulls. Actually it’s now the true testing time for the bulls and now whether they would be able to defend their territory or not is a big question and we have to closely watch. As the range of consolidation is for nearly one year we might see the market retracing to the levels of the range to around 5400-50 range and then attempt to move up where in it gives an excellent opportunity to go long.

it can be seen in the chart below that the market was stuck between 200 day MA and 100 day MA and not current break out has happened.

Now the question comes what would be the move. As the long range consolidation has broken off and this indicates what we may not be surprised if a new high is seen. Historically the break out of consolidation of one year or more are huge so keep your fingers crosses as I new two to three weeks the trend is going to be confirmed. 

Now we apply Fibonacci retracement and then see what are the implications. The market has corrected from around 6350 levels to around 4600 levels a fall of around 1750 points and now the market has risen by around 1050-1100 points so now its exactly at the 61.8% retracement of the entire fall from November 2010 to December 2012. So whether the retracement has completed or not only time would tell but we are at exactly the important retracement of 61.80% so watch out. It market move up then we can see it moving towards the next levels of 5950 and then the new high.  But first we have to see what is in store for next three weeks where in the trend is expected to be confirmed.

Wolf wave pattern: Wolf wave pattern which is popularly called at WW pattern has formed on daily charts for nifty. Its an extremely powerful pattern with success rate of nearly 80%. I myself has tasted success most of the times. One of the important features of this pattern is that it also give the probable target and which happens to be around 5150-5200 levels. So will the market go to those levels WW is pointing towards that but there is a catch in this the confirmation would come only on close below the 5500 levels. So till it’s not taken out there should be no problem for bulls. You may thing I have again become bearish its not that I am only telling the implications of the patterns.

  

 M. Sri Mahidar

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Sunday, September 23^rd  22.37 IST

Weekly technical Analysis for week ended 16^nd  June 2012.

During the week nifty did nothing but just moving in a close band of 70 points only and this is frustrating for the markets. It clearly shows that market does not know where to go and was not able to move in any direction and it was waiting for the news to make a move. One day the news was good so moved up and the second day not so good news and it moved down again. Market was moving only to both international and national news.  This clearly shows that market is undecided and the further movement would depend entirely on news. The movement appears to be slightly in favor of bulls .I have observed in my short stint as a investor and trader that whenever market moves only on news the moves are not sustainable. It may be on upside or down side. The present market from the lows of 4800 appears to have moved entirely on news and not on its own. So my view is that the up move would not sustain as we cannot expect positive news continuously. It may be noted that the raise during the last 10 days was on low volumes which is clearly indicating the market participation is not so great. The volumes should be high during the rise this is the cardinal rule. But as I say price is the king and we should believe in it and what even may be our study when price is saying one thing just believe in it. So as of now the price is saying market wants to move up and it is the thing we should do. As of now market is trying to move above the major EMAs which is a positive news for the market. Market has moved above the 50 day and 200 day EMA which is a good sign. Its now just above the 200 day EMA which happens to be around 5070 and till market is above it bulls would try to dominate the market. This would be keenly observed by the market participants as any move below it would sound death knell for the bulls. 100 day EMA 5200 levels so market might find some resistance at those levels and it is taken out then we can see a good and healthy movement for the market as bulls would get confidence. It may be noted that on a weekly chart the nifty has formed a hammer which gives an indication the bulls are strong and they intend to take the market up. It may also be noted that 100 week EMA is at around 5400 levels and we can expect the market to find resistance at that level. In the previous upmove from lows of December we have found the resistance at that level only. Market moved above it and then collapsed to sub-5000 levels. so even in case of extreme positiveness in the market we might find huge resistance at 100 Week EMA. I have been observing that over the last five to six months market is oscillating between the 200 week EMA and 100 week EMA. It is finding support at the 200 week EMA and finding resistance at the 100 week EMA. In December it moved below the 200 day EMA/SMA and then move up and again found resistance at 100 week EMA/SMA. We have to see whether the same happens now also. So these are the areas which are to be observed closely. One of the important things which are to be observed is that market has been making consistently making lower lows till now from November 2010 onwards and this is the first time it has not made a lower low(means did not move below the low of December 2011 low) and if it moved above the high of 5630 its high then we can say that we are in the firm grip of bulls and till that is done we can only assume that we are still in a bear market. So we have to see whether the market would go up and make a new high for 2012 to would fail to do so and confirm that we are still in a bear market and would go on to make a new low for 2012. Even the Elliott wave is becoming more complicated and I am not able to give it as I myself am not in a position to confidently tell what it is.  I would try to work out on the same this week and give up the Elliott wave update in the coming weeks.

Positive for the market:

·         20 week EMA has moved above the 50 week EMA

·         Nifty has moved above the 50 week EMA

·         Market has moved above the 200 day EMA – big positive for the market.

·          Daily MACD is in buy mode and is moving up above 0 which is really a positive sign.

·          

Negatives

·         Weekly and daily MACD are in sell mode.

·         ADX +D and –D all the three are moving down which is indicating that market might not be trending.

·         Stochostic oscillator is in extremely over bought zone.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, June 17^th 20.50 IST

Weekly technical Analysis for week ended 2^nd  June 2012.Nifty ended the week on a weak note and it has closed below all the EMA which is a weak indication. Market continues to be weak and also its pointing towards further down sides in the market. During the current week nifty moved up and failed to moved above the 20 day EMA, it found resistance at that level and then fell which indicates weakness in the market. One of the positive things is that MACD has still not give a sell signal which gives an indication that when ever the market tends to move down buying might emerge but we have to see how the market actually behaves.one of the points to be noted is that from November 2010 onwards when even market has moved up and then moved down invariably it broke the previous low and we have to see whether this time also the trend is followed. If it has to be followed then we have to see a low below the dec 2011 lows which happens to be around 4544 will it go there. We have to wait and watch. When ever this phenomenon is violated that we can assume that bulls have gained strength and we can expect a healthy up move in the market. Till this happens we can expect the market consistently moving down and trend is continuing. One of the points to be noted is that nifty is again at the 200 week EMA and we have to see whether it again offers support or not.  In December nifty moved below the 200 week EMA and then reversed with vengeance and we have to not see whether that again offers support or not. 200 week EMA appear to be around 4800 levels. So we can expect the bulls to defend their territory which they have defended successful over three years. Bears are trying all their means to break through the support level but not successful. So considering this the 200 week EMA appear to be laxmanrekha for the bears, till they take the market below this rekha they cannot take the market down. So the coming weeks is going to be interesting week as we can see a keen tussle between bulls and bears and we can also expect the market volatility to increase. So till the 200 week EMA is taken out its not advisable to short at these levels. Wait patiently for this barrier to be taken out. It taken out I can assure that bull would run for cover. And historically seeing when ever 200 week EMA was taken out, market has tanked heavily. So have patience and wait for the lakshman rekha to be taken out and then bears can have field day.

On thing to be noted is that over the last three week nifty has made three weekly candles in which the low of each week is above the low of previous week which is a good indication for bulls especially when the market is near the 200 week EMA and it clearly indicates that bulls are preparing an ammunition to foil any attempt by the bears. So be carefull as the market might  be very volatile and we can expect unexpected movement in the market.

It can be seen from the below chart that nifty has been failing to go through the resistance line drawn from the January 2012 highs, at-least during the last three months It failed to move above and every time it moved near it selling pressure came and the market fell. The trend line appears to be around 5000-5050 levels so any up move might find resistance at this levels and we have to be watch out at these levels.

Still my soft ware problem is not rectified so I am unable to give my Elliott wave updates. This weekend also I am not available so may not be in a position to post the technical update. I would try to do it if the time permits and internet is available.

M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, June 4^th 20.24 IST

Weekly technical Analysis for week ended 19th May 2012.


nifty during the week was one of a weak market. It opened on a weak note and there after tried to conquer 4900 moved near 4950 and thereafter tanked on the weight of the international weakness. The way the market cracked indicates an extreme weakness in the market. The market has failed to move above the 200 day EMA twice and then started to fall very fast and when it fell it broke through many support levels. even the psychological level of 5000 level did not offer any support and market fell through the 5000 level like knife through butter. The way it pierced through 5000 it appears that bears are coming into the market in a big way and would make all attempts to take the markets down. I have also told in my earlier updates that any movement below the 200 day EMA bears would find upper hand. Nifty failed to move above the 200 day EMA which is clearly an indication that bulls doesn’t have strength to support the market and long term investor have failed to support them market which is a very bearish signal. i have been telling from last two to three months that above 200 day EMA bulls rule the market and below it bears. So as its below it all the up moves would be sold into so its better to be short in the market than long. Nifty is below all the major moving averages and the distance between the EMA is increasing which is indicating that bears are having strong hand and market would attempt to go down. So be prepared for this.

it has been observed that over the last one and half years from November 2010 onwards all down wards movements went below the previous low and we have to see whether this time also market would make an new low. If so we can see the market moving below December low which happens to be below 4550 levels. se we are still 350 points away from it. Will it go below 200 day EMA only time would tell. So have patience if you want to enter into market by buying shares. Still there is no divergence appears in the charts/oscillators which is giving an indication that market might reverse. It appears from the charts that all the positive days are only on the basis of short covering rather that genuine buying.





 



It can be seen from the above chart that we have formed a heads and shoulders pattern over a period of nearly two years which generally very strong and it can be seen from the above chart that nifty broke below the neck line in the month of august 2011 and moved towards 4500 and then again moved up touched the neck line and started to fall down it’s a perfect technical set up and generally the second fall after the touch of the neck line would be more dangerous and also achieves the targets and the target for the same would be the length of the head which is around 1300 points and the break of the neck line is at 5400 so we can expect a fall of 1300 points from 5400 giving a target of atleast 4100 which is nearly 800 points away will it go there we have to wait and watch.



I am not giving Elliott wave analysis as my technical software having some problem as all the wave counts are written in there I am not able to update the same here. but it appears that market is exactly moving as anticipated. So next week I would update on EW.



M. Sri Mahidar

Trend is Friend

Celebrate Life

Sunday, May 20th 16.18 IST