Sunday, April 17, 2011

Technical Analysis for Nifty

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Let us check out the short term probabilities for Nifty trading based on Elliott Wave analysis and corelating it with other TA methods to get an insight of what is in store and a Trading Strategy to gain out of it.

1. Please go through the basic EW insight that I have been following - Reference EW Post.

We are currently in the larger 'c' wave down of the 4th wave on the long term charts.

2. This 'c' wave will unfold in three waves down. Currently we may be in the 'B' wave up after completing the 'A' down at 5177 level. 

3.This 'B' wave is unfolding in a complex three wave structure ( There is an alternation within a complex correction )

4. We are in the 'b' wave of the 'C' of this larger 'B' wave.

5. This 'b' wave is also trading in a three wave structure and we are in the last leg down which may terminate near apprx. 5720 level or below (if a=c)

6.  The Option Analysis shows a support at 5700 and Resistance at 6000 levels .

7. The Trendline joining 6338-6182 has proved to be a Resistance till now after the recent breakout above 5600 level.

So the observations derived from above and a likely Trading Strategy can be -

1. The short term bias is down.

2. The likely targets down are apprx. 5720 and 5625-50 levels . One may book out shorts here.

3. Positional Longs only above recent Pivot High of apprx. 5945 level with immediate target of 6100. (One may enter longs with s/l on trendline break and then position size above the 5945 level)

4. Making it simple , one may keep 5830 level as SAR for short term and manage with booking out at important levels.

5. An important Moving Average of 200dma is nearing the short term target area. This level will play important role in resolving the short term trading . Any break below it will signal weakness , but holding above it will give another try of recent high and further.
If breaks and holds ,one may keep 200dma level as SAR on closing basis for further trading. Also be prepared for a whipsaw or two at this level. 

6. 5600 will be a game changer level .The 'B' Wave count will end below it and will bring alternate count into play where the larger 'B' wave ends at last pivot high and 'C' down begins with a target of apprx. 4800 . One may again be short below 5600 level with appropriate S/L.

Will update at important levels. Have a profitable Week ahead .


Sujatha said...

that's good 5700 to 6000 :) shall we expect this time atleast 6K??!!

what is the reason for 6K nothing but me prepared one chart with bullish bias (since 5735 level) "as time pass" :) :D


PS : reality is always different :P

AAR VEE said...

Hi Sujatha-

Nice ,trying ur hands at charts.

so the 'chart'book comes free with the 'cook'book :))

Anonymous said...

Shouldnt the C wave of B wave from 5177 be counted like an impulse (1 - 5) rather than a-b-c?

Rajib said...

@ Anonymous,

Very valid point ... as per book.

Therefore, AARVEE even if we look for one more round of high towards 6K. I would like to consider your double zigzag to be part of 2nd wave of this 5-wave 'C' which started from 5250 level. The 4th may be on and we will have a likely target of 5750 + 350 = 6100 under the condition of 1=2 of this 'C' of larger wave 'B'.


AAR VEE said...

@ Anonymous-

The C wave of the B starts from 5348 and not 5177 .Pl.go through it again .B divides in to flat A then double zigzag B and now in C since 5348.

Ya a five wave impulse count where we may be in ivth of the third wave or 4th wave is possible.

AAR VEE said...

ya Rajib,

U may consider it as 4th wave and if u go by 1-2-i-ii-iii-iv labelling it will only be part of the 3rd wave.

I felt the 'a' of the C as a three wave structure rather than 5 wave one .hence taking this 'C of the larger B' as three wave one.

pl check again C doesnt starts from 5250 but later from 5348 (21-03)

Anonymous said...

hi RV nice analysis

as per ur count b hit tgt of 5720, but i guess its not the end here as wave b cant be smaller than wave a time wise!!
i think we are to see some complex action here