Sunday, March 25, 2012

Technical Analysis for Nifty



The correction since 5630 has been choppy and volatile last week giving both side moves . This may now be nearing an end with an expected trending move to unfold shortly . Let us check out the charts and data for the probabilities and critical levels ahead-
 

1. As can be seen the Indicators in Daily TF shows choppy trade since recent Top and now seem to be on the verge of breakout soon .



2. The critical data of FII's trading shows relentless buying since the recent top of 5630 . It signals buying on dips by them and hence an upward bias for trading ahead. ( Data courtesy Moneycontrol.com ).





3. The Futures data shows rollovers beginning for April series and strengthening of 5100-5200 Support levels as per Option data of this series.




Further in April series the Options Data as of now also indicates the same as Support area and a probable range expansion upwards as per Call addition.



4. The Elliott Wave Analysis for short term has both the probabilities open, that of an upward move considering a Triangle Pattern formation since 5630 (Black counts ) and that of a move down (Red Counts ). The near term looks positive for both the counts.



5. The 10d Volume Profile indicates a buildup at 5270 level apprx. with other critical levels marked. 



Conclusions :

1. The correction is likely to end soon.

2. The charts and data have an upward bias as of now for near term.

3. Apprx. 5270 can be used as Positional SAR for trading near term on closing basis. Upward targets are 5365 and 5430 and that lower may be 5200 , 5150 , 5080.
The move will gather momentum above 5445 ( Budget day pivot high ) and below 5080 (50% retrace level of 4532-5630 ) on closing basis.

4. The alignment of POC's in various TF that I follow indicate that breakout for near term can happen as early as next trading session on Monday. 

5. Be cautious for a whipsaw of SAR even on closing basis owing to volatility of Expiry week.

Trade safe with the Trend !!!  

38 comments:

prabha said...

Thank you for a wonderful analysis...The way you use the volume profile is absolutely marvelous.

Anonymous said...

Accd to me the pattern from 5630 is ABC(ZZ) X ABC(FLAT)till now, C is terminal in the last flat and still not over as the a of the 5th came at 5206 a gann 360 deg from the top of 5500,is now expected to go up to 5351(180 deg) and from there fall back to 5261 which is a multiple support area mentioned rightly by aarvee and from there retrace fast up to 5500 , The pattern which has come up from 4675-5630 is a corrective pattern well chanelised with b-b taking perfect support of the lower channel before breaking down and so eventually it has to retrace .618 of 5630-4675 which is 5039 but it wants to take a longer time as the 6181-5740 trendline which was breached by 4675-5630 corrective on the up should not be breached on the down as it is the 2-4 line of the 5th extension terminal of larger C of the flat 6357-2539-6338-4675.
So saving this trendline, which was once nearly tested at 5171 need to be protected and the nifty will travel on the top of this trendline on the down w/o breaching it after the up move now to 5517+, also it should take a long time to breach 5206 bottom if the 5352-5261-5517+ counts are adhered to.
Godwilling if nifty works like this we could shortly see breaching of the nifty top of 6338 in next 6 months

Tushar Thete said...

Thank you for a weekend analysis. It helps me to trade probability for coming week. Keep up the work.

Regards,
TT

Kumar Technicals said...

Dear RV!

Thanx for marvellous technical movie. You said rightly, Don't wish for it...work for it.

Rgrds,

Kumar

AAR VEE said...

@Prabha ,

Thanks ,I have a firm view that only Price and Volumes are absoultes in this market and this chart has both so I pay utmost importance to it while trading.

AAR VEE said...

@Anonymous,

Thanks for sharing ur view and counts in detail.

AAR VEE said...

@Tushar ,

Thanks for going through the post and leaving encouraging comment.

AAR VEE said...

@Kumarji ,

Thanks for appreciation.

Regards

AAR VEE said...

The Open has been below the aligned POC level of different TF which was at 5270-80. The Trend tilts to downward bias at open.
Longs only on close above 5280 now which will also be the stoploss for positional shorts with targets mentioned in the post.

Anonymous said...

Thanx AARVEE,

I appreciate your presentation and your taking various aspects in to consideration is mindboggling ,you do not leave any leakage , fullproof , very attractive and effective too.
There is one very humble request , you start looking at Neo Wave , I think it will definetely help you in enhancing your extraordinary capabilities.

KRG said...

Anonymous: I was thinking on the lines that major "C" may be still on since Jan 2011 (or Nov 2010 high). Jan-11 to Aug-11 ABC and now ending irregular D; E targeting Jun-Sep timeline
On your count, couple of doubts...
1) If the 2-4 trendline is broken, why should further action stay abive it in the next wave?
(2) March/09-Oct/09-May/10-Jan/11-Aug/11... the time similarty looks too good... If so can Aug-2011- March 2012 can be the fifth of such action? Then we are in a long grind !

piyush sharda said...

good analysis rv.

oi points bullish. so is that preferable count.

as u used adx i remember having read it. its so fancy . but i could
really not apply it in trading. i cudnt comprehend its edge over ema
or two ema crossover . here looking at prices also one can see its in range i cudnt understand why wilder made a complicated mathematical formula for it ( he also mentions the way u mentioned it) and he considers this as one of his best inventions .

Anonymous said...

@KRG
1)The 2-4 line is still intact,it is broken on the upside by 4675-5640 is a corrective A wave of the larger X wave which has started,today it is around 5130 and falling everday by 4 points thats why i was saying that the nifty will reverberate up and down but should not breach the 2-4 line on the down and once after some time say around mid may when the trendline will be below 5040 the nifty will retrace below 5040 and complete its B wave below .618 of 4675-5630 ie 5040 ,now I am not sure whether the corrective 4675-5630 is in double combination or triple combination and so the bottom could me max either 4975 or 4855 and in that event would take a long to make that bottom as in condition the 2-4 trendline needs to be protected if what I presume is true(larger ABC with 5TH extnsion terminal C)which has failed also called as severe failure)
2)Regarding time similarity there is rule in neowave that C can fail below .618 of a flat in only such circumstances where A and C take same time or C takes little less time than A and B takes most of the time , here a wave 6357-2539(double zz + doule failure flat) took 61 weeks ,then Bwave 2539-6338 took 85 weeks and C (5th extension terminal impuse) took 61 weeks ,so there satisfies the rule of a severe c failure.
Now we will think in a larger context ,accd to neowave principle the pattern prior to the 3rd wave should always take atleast more time than previous impulse and preferably double the time than the previous Impulse(920-6357) time around 4years and preferably be a double combination of the running variation also called as the Double Three combination of the Running variation with large X wave.
Now the move on the up is an Large Xwave ie more than 1.618 of the previous pattern, It is less complex than the whole previous pattern but more complex than any one arm of the previous flat and time taken is more than A and C wave individually but less than time taken by A+B , preferably (A+B)/2
now preferably it will be ABC X ABCDE and would span for another 4 years where the x wave could take you to minimun 7500 to around 8500 optimally and the the triangle would resume where the volatile A of the (ABCDE) would not fall below 6357 to make it DOUBLE THREE RUNNING and then BCDE would complete before the explosive 3rd wave starts.
We have been knowing for long that C will fail and be terminal as there are two conditions after a C failure 1)larger Impulse than the previous IMPULSE preferably 1.618(pr impulse) or2)larger XWAVE bridging the two correctives in different planes where both the correctives do not eneter each others area or called as Running combination
and in this context it was clearly the 2nd option as I have explained the reasons above and mostly the C wave failure is accompanied with terminal impulse also a 5th wave failure.
Now the Cwave 6338-4531 terminal is a 5th extension terminaal , how , the rule of the 5th extension terminal says that the 5th wave should be minimum 1+3 subtracted from the top of 4th wave so 1+3 is 6338-5177=1161 subtracted from 5702 gives you the target of 4541 also 4th wave is more complex than the 2nd where 5690-6181 was simple whereas 5177-5944-5196-5702 was complex with a C failureand thus a bigger 5th wave, bigger than 1+3 taken together came in to reality with a terminal activity in the C wave of the 5th wave(5399-4675)(1st extension(5399-4639)terminal impulse) and 5th of cwawave ending at 4675 with a failure.

Anonymous said...

@KRG

PLs read 1st line of 2) as C cannot fail below.618 of B wave instead of Ccan fail below .618

AAR VEE said...

@Anonymous,

Thanks for ur viewpoint. I have the Neely's Ebook since sometime but couldnt go through it. I will try to read it as and when time permits.

AAR VEE said...

@PS ,

Thanks.

I like to check different stages of market with indicator suited for it.They help as per their formulation for specific use.

Lots of whipsaws and volatility expected. Trade with caution this expiry.

AAR VEE said...

The count from 5630 now looks more like a-b-c -X- a-b-c ,now in 'c' which may take shape of ending diagonal since 5500 and may be trade in its 'd' wave tomorrow.

Some diversions developing in daily and hrly TF.

Trade with caution till expiry.

Anonymous said...

HI AARVEE,

IF YOU HAVE NEELYS EBOOK search for C failure in the 10th chapter , that will give u a clear idea of the pattern since jan 2008 also chapter 11 fig 11-8 and the explanation on it.

KRG said...

Anonymous: For your larger context, do you mean that the pattern prior ( or POST?) 3rd wave should take double the time and be a double combination? Could you give me the corresponding reference

On the LT count, something major ended at 2008 top! You are saying this is first, why not 3rd?

Anonymous said...

@ KRG

1)Prior to the 3rd wave as 3rd wave is an extended wave and the previous corrective ie 2nd wave should take double time then the previous impulse
ref: chapter 8 (look for complex double three with larger Xwave ) or refer to magic and logic of elliot waves by hemant kale and mr pradhan
2) why not third wave? as if yu consider 6357 top as 3rd wave then yu have to consider 0-920 as the 1st wave and the size of the third wave makes the 1st wave microscopic where it is not allowed more than 4th wave of the 3rd wave or the 5th wave will fail, here in this circumstance the wave after the 6357 came down deep to 2253 which is not allowed , also the 4th wave is mostly a triangle
Yu are welcome for any further doubts

piyush sharda said...

market is indeed volatile rv.
for adx i cudnt find its utility.
whenever time permits i would request u to explain the edge of the(adx) indicator.if u make a post it can be used for future reference too.

even for other indicators it would
be a great learning too see and understand how and when u use them.

KRG said...

A: Sent u a mail. pls chk n revert

piyush sharda said...

rv,
i posted a comment at around 3.30 today . its not there.
if possible can u post updated hourly ew chart

AAR VEE said...

@ Anonymous -

Will try and get the insight on the C failure on weekend.

AAR VEE said...

@PS -

For general trading and watchiing indicators the simple rule is to get the trend in the TF u r watching. Its up ,down or side ways.Then u go for the indicator for range or trend trading. Always keep an eye on higher TF while u trade lower one.

As in comment last night the abc-X-abc since 5630 and its last c since 5385 may have ended today in ending diagonal and new impulse (major or subwave of next leg) may have done its 1-2 today .

As pointed yesterday ,now the positive diversions in hrly and daily are getting prominent wrt double bottom of 5171-5175.

More than EW I am trading with help of volume profiles and other TA levels in this correction.
5280 remains a resistance in ST though oulook is positive if the lows are held now.

AAR VEE said...

PS-

Typo above in last sentence -'outlook'.

There may also be a probability open for an 'e' left in the ending diagonal of the 'c' in hourly which may end near to 5180-5200.
Trendline from 5500 down break may confirm the new impulse but as of now I prefer longs with s/l at low.

piyush sharda said...

thanx for view rv.
at the time of posting its looking like diagonal from 5498. till 5175
3s are clear. may be d (up) going on
to trap longs and then e to to trap shorts and create proper day divergence (last line like a story :-))

karthik said...

How about an anticlimax tomorrow? U all expect up ? What if we break down to 5130-40 and when the most of the markets participants have given it up in theafternoon , a surprising rally on the upside suddenly to make for a kahaani :-)).I think that is what will happen.

cheers

Anonymous said...

@ karthik
5137 is ABC target and 5120 is the 6181-5740 trendline so your version is a possibility

AAR VEE said...

@PS ,

The correction continues , impulse count invalidated early . aggresive buy becomes neutral at close. Positional weakness continues now below 5215 as per profiles. Pain in store for buy on dips traders since monday open below 5280 ,the positional SAR.

KRG said...

Anonymous: You should adopt a Net name, so that we know it is the same Anonymous!:)

Karthik's calling looks a good kahani indeed.....

Cheers

karthik said...

Anonymous could you send a pictorial representation of your neowave thoughts so that we can understand it better?Though neowave is more like greek and latin to me, it would be good to know how it has been working so far.Also do adopt a name as KRG suggests.

karthik said...

Anonymous are you ready for a break up of 5120 next week?If so what would be your view on nifty.There is a very good chance that it (5120) will be breached next week.

Anonymous said...

see 5120 is not a fixed point , it is 6181-5740 descending trendline and the TL reduces every day by 4 pts so till it is saved the scenario remains bullish , as the pattern figuring now has an actual target of 5039(min)-4975(opt) and 4884(max) and how could it be acheived w/o breaking the TL? ,is by skirting along the TL or doing whipsaws ,by going away from the TL as last time around 5171 it did , till at least the min target of < 5039 is not acheived

Shailesh

karthik said...

shailesh lets assume the trendline does get broken and we touch base with around 5000-5040 which i expect in the next few days, does that completely change the bullish scenario? We could touchbase with 5k levels and then bounce back hard upwards.What is your base case scenario of where the market is heading if the trendline you are talking about is broken?

piyush sharda said...

thanx for the view rv

Anonymous said...

Looking at todays B/o end of 10th april could see 5500 and if it does happen in the above said tenure then 5135 should not be broken for another 24 days starting thursday 11am,

Shailesh

piyush sharda said...
This comment has been removed by the author.
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