Sunday, August 12, 2012

Technical Analysis and Elliott Wave Update for Nifty


Markets reacted from apprx. the Resistance zone given in last post of 5380-95. Now the closes after that have been above 5300 and the down sessions have been on comparable lower volumes. The Weekly close has been neutral . Lets check out the probabilities and factors supporting both the causes.
 
1. Elliott wave analysis throws up a short term Bearish probability which may turn out further Bearish in medium term . Check the charts below carefully with observations in each .

We may be trading in a larger Time Frame B wave that may be a Triangle ( or alternatively a Flat ) .


The C wave of the Triangle may have been done ( or the B wave of the Y as in purple counts above )


We may have started the new leg down completing wave 1 of it.


We may be in the wave 2 (if correction is going deeper ) or alternately wave B ( for a shallow correction ) .


The above bearish view invalidates above 5378 and we then look for higher targets of the c-C  as in previous post  (now may be doing 1-2, i-ii from 5032 for bullish counts or a v-c left for completion of the C ) --- Check Here.

2.  The Targets down if we correct below 5378 may be these Fibonacci retraces and Gap fill .



3. The Options data as of now is supportive of the correction below 5400 with supports near 5100 and 5200 . The Open interest of 5400 calls being higher than that of 5300 puts and Support now developing near 5200 with addition in puts there in the last session .



4.  Bearish Indicators :

The VIX and Weekly ADX are at rock bottom values suggesting bigger move to come ahead which has higher probability of being down as of now . 





5.  Bullish Indicators :

The  Bullish Pattern on the hourly chart of Inverse Head and Shoulders is a caution.   


The important Moving Averages for Long Term now show a Bullish alignment after 2010.


 In the Stock Market , Liquidity is the primary mover  and this rally since start of 2012 is backed by FII inflows and can invalidate the bearish view as it shows no sign of letting the steam off .



So in the short term :

1. Bearish below 5294 and close below 5300 . Resistance in 5330-50 zone now .
 Bullish above 5378 and close above 5350 .

2. Targets below may be in zone of 5230-5200 initially . Targets up may be apprx. 5430-50 .

3.  The probabilities of correction being a shallow to end near apprx 5200 or below it for a larger one in Medium Term equally exists.

4. Long term Bullish indicators cannot be ignored till they give reversal signals . 

We review as we move near important levels mentioned above.

Trade with Price signals and Caution ahead .  

17 comments:

Kumar Technicals said...

Dear RV!

You are giving blockbuster continously, very good work as usual.
Keep continue, all d best:)

Rgrds,

Kumar

Piyush Sharda said...

very comprehensive and detailed analysis. from 4770 to 5378 is probably a dzz. ie wxy . w and y whud have 1.618-.618 relationship here it has .59. just for ur info...

SP said...

Thanks for the wonderful post!

AAR VEE said...

@ Kumarji ,

Thanks for continous support and good wishes.

Regards

@ PS,

Thanks , Move from 4770-5378 can be a simple zz ,5-3-5 with c=a as of now .

@SP ,

Thanks for going through it and leaving ur comment.

AAR VEE said...

EOD UPDATE :

Some important observations today :

1. Option data has changed significantly today with 5300 puts exceeding the 5400 calls . Aggresive writing at 5300 pe when near to 5300 level and unwinding of 5400 ce later are bullish signal. We now should check its followup.

2. Good addition of 4% in NF with todays upmove.

3. 5320 now is the level to be watched on clsoing basis for upmove to sustain. Bearish below it and bullish above it on closing basis.

4. EW has moved to complete the min requirement of an a-b-c move from Fridays low. 5378 remains invalidation of this count.Confirmation below 5294.

AAR VEE said...

@ PS

Sorry got it wrong ,I was talking about the move from 5032-5378 as ZZ and not from 4770.

As calculated in last post its c= 61.8%xa comes near 5390 levels.

Lets wait for clarity to emerge either at break of 5294 or move above 5378 .

Anonymous said...

I think Nifty shud come to betn 5271-5246 levels and then begin its journey towards 5630 by 17th august and from 18th august a new rally shud initiate to around 5630
God bless

Shailesh

Anonymous said...

18th is saturday so read it as reversal from 20th aug on the upside target being 5597-5630

shailesh

KRG said...
This comment has been removed by the author.
Srinivasan Krishnamoorthy said...

Fine explanation thank u for this post

AAR VEE said...

@Shailesh ,

Thanks for ur views and update .

@Srinivasan ji,

Thanks for the comment .

AAR VEE said...

EW UPDATE :
-------------------------
The short term bearish probability was invalidated by crossing 5378 in last session though signals against it started coming on mondays trading session itself and likewise obeservations updated eod.

Now considering the move from 5032 as a 5 wave move up( calculations as mentioned in last post), we may now move positionally to 5450 ,5510and later above 5610-80 in this series/first week next series.

One should now keep 5320 as positional s/l on closing basis and follow the trend till invalidates.

Nilesh Patil said...

Thanks for your regular and timely update sir.

AAR VEE said...

@Nilesh

Thanks for visiting.

AAR VEE said...

EOD UPDATE:
-------------------------------

The EW count may not be a 5 wave move up from 5032 but may be a double or triple ZZ in formation. The move today and subwave counts are not fitting in a regular 5 wave move.Will try and review detailed counts on weekend.

But still the trend is up with positional s/l at 5320 as suggested from last two trading sessions .

Ramesh said...

I have posted an article on Nifty Future would like your review comments
http://tradingniftyoptions.blogspot.in/2012/08/decision-point-nifty-future-trading.html

COMMODITY TIPS,MCX COMMODITY TIPS said...

The rupee was at 60.64/67 in early trades as against Thursday’s close Of 60.43/44. Agri Tips

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