Sunday, January 20, 2013

Technical & Elliott Wave Analysis for Nifty

There has been a consistent negative diversion in different time frames since the high of 5965 was made in December 2012 but till now it has not been confirmed with significant price correction instead Price have been making higher highs . Lets see what probabilities lie ahead in the following charts and observations -

1. Weekly Chart :

2. Daily Chart :

3. Hourly Chart :

4. Channels:

5. Elliott Wave Analysis :

Extending wave 3 ( above its 1.62Xwave1 tgt. of 5965 ) with extending Vth subwave (also above 5965 tgt.of equality with subwave I ) may be the probable EW count.

6. Option Analysis : 

5900 Puts and 6200 Calls have almost similar open interest and this can be the larger trading range ahead. 6000 Puts open interest is much larger than its Calls, signalling developing support base at this level and 6100 Call buildup suggests a short term resistance .

Conclusions :

1. Extended Upmove continuing as per Charts,Options and FII buy data, Bias Up as of now.

2. Though Daily and Hourly both have bearish patterns with negative diversions , caution should be for bearish bias till confirmed by price action .

3. Close below 6040 will alter near term bias and close below 6000 will negate the short term up trend.

4. Above last high of 6083, we may witness fast move towards 6150,6180,6225 apprx.

5. Shorts have entered system in last week trading, suggested by the drop in futures premium and decrease in cost of carry with increased futures open interest . Above the recent high we may witness short covering .


Anonymous@V said...

Liquidity and underexposure by retail and ongoing reforms and positive outlook for INR.....point to is buy market....

Anonymous said...


You are a good chartist but please use the correct terminology - its not negative diversion its negative divergence.

All the best,

paddy said...

Thanks RV for the unbiased analysis!! It really helps to play safe than sorry!!

Warm regards,

Unknown said...

Thanx Mr. RV, u make things simple.


Sanjay Barua

Piyush Sharda said...

good analysis rv

karthikg said...

Nifty in the last stages of its upmove Financial Tsunami to follow.We are just days away from start of the mayhem!!!

AAR VEE said...

Anonymous@V ,Paddy ,Sanjay ,Piyush,Karthikg

Thanks for ur comments and sharing of views.


AAR VEE said...

@Venkat ,

Thanks for leaving ur comment .

'Divergence' is not a technical term but part of speech for describing the 'deviation' of indicator movement wrt price movement .
'Diversion' is synonymous to 'Divergence' and conveys the same meaning.

Check the thesaurus entry for 'Diversion':
Main Entry:diversion  [dih-vur-zhuh n, -shuh n]
Definition:change in a course, path
Synonyms:aberration, alteration, deflection, departure, detour, deviation, digression, divergence, fake out, red herring, turning, variation

Hope I was able to convey the insight of analysis by using a synonym in the post, inconvenience if any is regretted .


bizagra said...

thanks aarvee for the update.

Girish Desai said...

Thanks for the detailed analysis RV.

chetas said...

Thank you for your detailed indepth analysis.

few doubts :

1. No alternate lable in EWS(item 5 ), does this mean alternate labels are pretty much invalidated ? have mentioned if top in place pattern will end as ED, otherwise 6148-6180-6225 possible, how this levels arrived at ?

# my understanding is if wave V goes 1.618 times wave I then 5548+673= 6221

# if Wave V equals wave III then 5548+599=6147

# also wave 3 doing 2x wave 1 ( 5032+578*2=6188)

is this how the levels 6148-6180-6225 arrived at?

3. the pattern that we are still in corrective Larger B, doing the c-B is valid correct?
a was 4532-5630 = 1098 ,
now c has alreday crossed c=a trgt
can do 1.236 a or more ( 6128)

thankyou once again for the detailed analysis

AAR VEE said...

Hi Chetas ,

1.Though there are some alternate counts but not any to put in right now. These are the counts being followed lately. wave 3 was expected to be over at a likely tgt of 5965 above which it seems to be extending.

2.The higher tgts calculated are as follows -

wave 1 =4770-5348 =578
wave 3 ideally would have ended near 1.62 times of wave 1 ,at 5965-70 apprx. so crossing that we may take it as extending for next tgts that may be of wave3=2 X wave 1 which comes to apprx 6190 which is near that pivot high marked at 6180.

Now if we see the subwaves of wave 3, we may be in V-3. We can see that subwave III was less than 1.62 X subwave I ,so we may expect the subwave V to extend. As subwave V has crossed equality with subwaveI at 5965 ,it can end with many probabilities ,like that of crossing subwave III length which will give 6148+,/ 1.62XsubwaveI will give 6225.Next may come relation with length of subwave I-III etc.
We take step at a time and keep looking for targets and invalidations and combine them with other technicals for confluence zone.

3.wave C can do a max of 1.62A above which counts to be rechecked for impulse generally.
I feel in larger TF we may still be doing a corrective of rise till 2008 from where we may be in a wave 4 which may be doing its B.


AAR VEE said...

Thanks bizagra and Girish for leaving ur comments.

karthikg said...

Markets to TOP out in the range of 6105-6111.Massive PLUNGE to follow taking Nifty to 4300 and lower!!!!

Kumar Technicals said...

Dear RV!

Your post is always worthy of appreciation, very good work.

Today our services completed 100 days. I am thankful to you from bottom of my heart for your good wishes & moral support always.



AAR VEE said...

Dear Kumarji ,

Hearty congratulations to you and your team .Our best wishes are always with you for continuous positive efforts and results in future also .


Kumar Technicals said...

Dear RV!

Thank you so much for your good wishes. Your good wishes & moral support always encourage me.



Anonymous@V said...

eagerly waiting for your next post...looks like RBI rate cut if 50 bps, will propel markets higher....25 bps already that case 6100 may be a top out.....

AAR VEE said...


All the charts and conclusions in above post remain the same.

1.There was a whipsaw of 6040 on closing basis in hrly tf and lower trendline but was supported by the 6000 level and daily lower trendline.

2.RBI policy on tuesday may be the next trigger .For Bank Nifty 12650 is the imp pivot level above/below which a good move will be seen.

3. Downside bias only below break of last low at 6007 and close above 6100 now positive with caution.

4.Options data now has 6000 -6200 range for the expiry week .

Ananymous@V said...

Thanks aar-vee....if possible also comment on some nifty stock charts you find interesting....technically...ranbaxy looks good to me...i may have positiion in ranbaxy...

chauhan said...

Sir yester days low,s has a any signifisense

Anonymous said...

Its an weekly engulfing bear candle

AAR VEE said...


Normally I follow and trade Nifty only. Not analyzed Ranbaxy but Titan (above 275),Tata steel(above 412) look good for upmove ,DLF good for downmove( below recent top ) . Bharti and Reliance at imp average support ,neutral can move up.