We have completed half year trading of 2012 . Lets check out Nifty in different time frames along with probable Elliott wave counts , Indicators , Patterns ,Trendlines and associated data for what lies ahead .
I was to post this at weekend (but couldn't do so due to internet services disruption) so the charts have captured the move till last week only .
1. The probable EW count that I have been following since high of Nov. 2010 is as in chart below . It should be noted that the Channel move since the correction set in from 6338 has been broken upwards , tested on multi week basis and prices are sustaining comfortably above it .
2. The Fibonacci chart below shows the retraces of the X waves in this corrective till now. It normally retraces 61.8% -76%. We may now be doing an X wave from 4770 ( or alternately a B wave ).
3. The Stoch Indicator behaviour since Nov 2010 on Weekly basis is as below . We are now in overbought zone and near the red trendline marked that may offer resistance.
4. The Daily chart below has combination of RSI , Channels & Trendlines . The Red Trendline from 6338-5630 may act as a Resistance (now near 5400 apprx) . If that is taken out and sustained ,then we may move in the Green Channel bullishly upwards.
The RSI behaviour shows a near Overbought zone trading now. Its time to be cautious as well as have an eye on a bullish trending move in overbought zone above the red trendline.
5. While labelling EW counts from 4770 , I came across an interesting observation that the last few days of trading on hourly TF looks almost similar to that in Daily TF of 2009 . ( Had posted the same observation at Twitter on 19th June also.)
6. As of now I find the upmove since 4770 as a 3 wave structure of A-B-C and hence marked it as a whole for a X (or B) wave . Will relook at its structure if sustains above 5500 for an impulse move. (Had posted the same insight at Twitter on 26th June)
7. The structure of Long Term chart with 50-200dma Death cross again is cautioning against a sustained upmove as of now . It can very well again reverse as it did in 2004 which will be very Bullish .
8. The Market moves on Liquidity which decides the Price and Volumes both . The FII data for 2012 till now is quite bullish . They have poured in large sum of money despite all talks of Global problems and Local fundamental issues . Its at par with 2009 data when the recent years low was made. They seem to bet on further bullishness to come . Check out yearly data since 2008 and you can see how they have deployed their bets.
9. Can this be the alternate Bullish count where the wave 4 since 2008, as taken in Basic EW counts of Long term ( Check Here ) , has ended recently ?
Conclusions :
1. We are at a critical juncture for both Long term and Short term trading where both the probabilities, of going lower below 4770 and higher above 5630, exists.
2. In short term the zone of 5300- 5425 looks a probable Resistance as per Fibonacci , probable EW counts and Trendlines . A Reversal may also come from this zone so caution required with an eye for any topping out signals.
3. Sustaining above 5400 and Red Trendline resistance may open up higher targets above 5800 , with a up trending move in overbought zone as in Jan-Feb rally.
4. In case of correction from Resistance zone , keep an eye on lower trendline of Green Channel and Monthly Trendline for Support.
HAPPY TRADING !!!
54 comments:
Thanks aarvee for this gr8 and simple.....this is very helpful for me..:)
Comprehensive work , thanx, i think we are ina diametric since the last few yrs, wherein this rally should end around 5800 and back to 4500
Dear RV!
Thanx for marvellous technical movie after long time. Your work is unbiased, it shows dedication, sincerity & deep knowledge of EW. Keep continue your good work.
Regards,
Kumar
good and detailed analysis rv covers all aspects.
what is ur analysis of fii data frm 2008??
Great work RV.
Hi Aar Vee: Welcome back.. one small comment on (9) above. Though there is no rule of proportionality in traditional EW, the D&E are quite small as compared to A&B and hence the triangle interpretation as above may be avoidable. For the bullish count you have to simply shift the "C" to where you marked "E" and you have (1) a C-failure flat; with major bullish implications or (2) a potential triangle with D just started & E to follow; with reasonably bullish tone
Cheers
@bizagra ,
Thnks for appreciating and leaving ur comment. Keep the charts in record for ur positional trading in coming weeks/months, they will surely help.
cheers .
@Bullish Cartel ,
Thanks for the comment .Ya this view of a diametric has been shared here before. But since I dont follow Neo waves of Neely ,I stick to traditional 5 & 3 waves and patterns arising from them.
Keep updating ur views .
@Kumarji ,
Thanks for all the support and appreciation . Though I find ur views and trading simple and effective away from all this mumbo-jumbo.
Regards
@Piyush ,
The FII's have been pouring money all through 2009 and 2010 and in 2011 inspite of correcting from apprx 6200 to 4500 their selling was negligible. Again they have started deploying large sums as in chart of 2012 despite all adverse news both global and local . I think they r sure of long term bull market in India and coming new all time high this year or next and also now r confident of all bad news factored in prices.
Normally Market is ahead of news by atleast 3-6 months and they seem to know whats in store (atleast globally) and taking bet on it now.
apprx. FII data -
2008 = -53,000 cr.
2009 = +83,500 cr.
2010 = +1,33,250 cr.
2011 = -2700 cr. (only !!!)
2012 = +43,750 cr (till june )
@San ,
Thanks dear . Keep on ur good and consistent tireless work day after day.
Best wishes.
@ KRG ,
Thanks for ur input .
I have a bias of the move since 2008 as a 4th wave and that taking a shape of ascending triangle.U can see it in basic count post and links in it. (mainly due to structure of 2009 & 10 and falling volumes there after as happens in a triangle pattern)
You may be right about the triangle wave D and E being quite small . There may be one more logical probability that C ended where it is marked ,we dont move it. The move from 4530-5630 be as subwave a-D ,5630-4770 as b-D and we r now in c-D that may or may not cross trendline resistance . if crosses it than we shift the upper trendline for c-D (near 5900 apprx by c=a ). Later comes the last leg of E completing the triangle then followed by upwards break in wave 5 somewhere near Diwali .
Pl .Check it out and comment.
Regards
WOW aar-vee, the chart with stochastics was an eye opener for me :-)
Aar Vee: Yes. The variation you mention, i.e., currently in "c" of D is I think the popular version on the net, including by some neo-wave followers...
I am looking at completion of major C at 4770 for few reasons.. (i) It fits rather well into the time targets (C=1/2 of A+B, one of Neely's ideas) (2) The whole C ends at a higher low (again, this idea of a trend commencing not at lowest low, is a major pathbreaking one in my humble opinion) creating enough doubts and calls for fresh lows while the bear squeeze is happily on (3)The 4770-5124 looks like an impulse (a rarity these days as Neely himself says)giving hopes of a fastest and largest move (4) More importantly, the subsequent action which is corrective in time and structure but not in price!.. Running corrections in 2nd wave position are exciting prospects and if we congest more above 5180, it gives scope for a double three running correction in wave 2... (5)INR seemed to have created a sharp dynamic the otherside and hopefully commenced reversal (6) Crude is correcting after a sharp fall, but I will not be surprised to see much lower later on (7) S&P seems to have begun its last upleg
Target after the double three running..6100 assuming 2nd ends at 5180 and looking at 262%. Caution levels for this view are 5180 (the X of the second corrective, i.e., where you marked the last wave as 3-C in (6) above) & 4990 (38% of 4770-5124)
thanx rv.
God willing Looking for 5137 min or 5034-4996 max levels to complete this wave from 5630 by 18th/19th july, from there could expect a sharp rally
Shailesh
Shailesh: Is the logic of fastest/largest move used for the whole wave or even for segments? E.g. If I look at 45xx as part of the previous upmove, can we now strecth the time requirement for current rally till 1st week of August to qualify as the fastest?
Cheers
An B or D wave is generally the slowest but if the previous waves(A or C) takes more times by subdividing to a double combination then the ensuing b or d wave comes fast or larger tan the previous wave depending on the trending of the 2nd combination of the A or C wave, mostly it trends upwards and the min retracement is .618 though it always exceeds .80 or bigger tan the a wave itself, this situation generally is seen in a running flat or running triangle,
what yu are talking about is larger 4th -(4695-5630) and 4th of the 5th terminal 4847-5333???????? according to me and it will remain true till it does not cross 5379 so yu infer upon yurselves for the conclusion
Shailesh
By the way the presentation giving different perspectives as different colours of the rainbow is fantastic , wish i cud have this acumen and knowledge good going Aarvee , keep it up as we get so much ready made information and it adds to our studies and helps it
Shailesh
I think larger C is yet to complete probably by 18th /19th july at around 5137/5034
Shailesh
@Waquar ,
Good that it helps understand the perspective.
@KRG ,
Ok so u looking of completion of C at 4770 and Shailesh having a probability of one more leg down for completion of same.
Thanks for the insight behind ur bullish stance.
@Shailesh ,
Thanks for the input.
Hope u can provide a link for charts of ur counts in long term and short term TF uploaded at blog or any site. It will be easy to understand through the visual .
Also i dont get it about the completion of wave from 5630 at a higher low than 4770 as u mentioned at 5137/5034-4996.I would prefer it as a correction (wave2/B) for the move up from 4770.
Cheers !!!
Hi Aar Vee
In fib retracement chart the current 78.6% is almost equal to 61.8% of previous retracement and equal to 23.6% retracement prior to 61.8%.
Thanks
Hi aarvee actually in neo wave in a 3rd extension terminal when 4th is more deeper than or bigger n size than 2nd then 5th is bound 2 fail the same logic for 5499-????? Is true as 5630-4695 is a 4 th wave wth a 5 th failure and 5333 - 5137/5034 cud be 5 th of the 5th which Shie fail thatswhy above 4770 it shud terminate shailesh
I don't have the tools and i am not much comp savvy like you aarvee to give such a wonderful presentation as you so I will be not be able. To upload labelled charts 8675like you I can tell to onething that the minimum target for nifty is 10250 after around 5137/5034/4996 and in severe panic 4857 I prefer 4996/5034. Shailesh
Shailesh: thanks for the perspective.. sure there is scope for bear market ending further high, say 4990 (many things seem to coincide at this level)... the higher it ends, the larger the scope for next upleg...
On the internal structure of major C, I was speaking of larger 4 (4695-5630); I thought it ended at 4770 since 4770-5124 looked impulsive and a fresh upmove rather than as 4th of 5th
@ Randhir ,
Nice observation .All these fibo .levels lie at apprx. 5400 +- levels. Lets keep a watch on it.
@Shailesh ,
Is a 5th failure in such a condition a rule in neo waves ? Though by traditional EW i can get ur long term 10,000 + level if wave 4 ends in a triangle by height of it which is 4000+ points. though not very sure whether it will make a higher low above 4770,if so would consider it as b-c-D as mentioned to KRG in a comment above of probability of D wave on in subwave c.
@KRG ,
can u give me the date of 4695 ,which u r considering for larger 4th or still better update with the chart of these counts at ur blog . Thanks.
4695 is the low on Jan 6 2012.
Shailesh is probably referring to this as end of 3rd extension within C, Then from there to 5499 (14/03) is 4th of C. If you follow this, then 5499-5135 (29/03) will be (a) of 5 of C; 5135-5279 (02/05) (b); 5279-4770 (04/06)(c) and 4770-5333 (d); then looking for a final fall... I was looking at it slightly differently; but it doesn't matter as implications are similar. Shailesh would have probably checked the internals closely, which I am not too sure I do.
On C & 5th failures, I feel that these are quite common and provide the logic for higher lows and lower highs. The higher the degree of failure, the larger the post pattern implications.
@ aarvee
The condition of the 5th wave failure is that 4th(4695-5630)(I take 4695 because there if yu study the previous waves and their post pattern implication yu do not break any rule and the most imp thing is that wherever yu end your wave, the ultimate or the last part of the wave or the last subwave of that wave should retrace fast , thenonly yu can term it as end of the wave and after that ultimate wave is retraced fast it can carry out with its own nature like b and d are slower waves and so on) should be larger in size than 2nd wave(5177-5944-5186-5740 or 5702) in an terminal impulse with 3rd wave the biggest of all the three waves to facilitate a 5th failure
@krg
I wud be happy to label this last 5th wave from 5630-??????????
as ABC aand A ended probably at 4847.7 with again a 5th failure of C wave starting from 5279(ABC)(5630-5177-5499-5136-5279-4847.7) AND now probably B is in process where C from 5279 is completely retraced faster than the time taken to form (whatever yu label postpattern should confirm the previous pattern is my way of labelling or neely says your labels or wrong and if you follow this yu are rarely required to recall your counts)and then wud be followed by C(which shud be definetely be a terminal)
@KRG ,
4695 seems to be low on 09/01 and Shailesh has explained his 5th wave count from 5630 in comment later .Thanks for ur inputs
@Shailesh ,
Thanks for ur logical explanation for labelling counts.
Shailesh: Earlier you mentioned that the time target for major C is around third week July. However since 5630 we have already consumed about 4 1/2 months. It would then appear that the terminal you are expecting to end the major C should take a couple of months atleast?
shailesh
as i am too comp unsavvy i can understand ur dilemma.
if in any charting package label u can mail ur views to aarvee in jpg/png file and he can upload the filein comment section or as he feels appropriate so
it'll be easier us to understand. if anyone is not well versed with neo its very difficult to understand the text without chart
krg, shailesh, rv
though neo is said to be advanced as compared to ew , in ew c of flat shud be b/w 0618 to 1.618 of a.
here if we say c 6338-4531 means only 47%. so flat labelling of ew not allowed as per pretcher
Piyush: C that is less than 62% would be considered as a C-failure and becos it is a failure, the subsequent should be very bullish; becos it seems less than 50%, I was feeling that atleast time-wise it should spend till mid-2012.. Now that we have past the timeline, I am comfortable with a C-failure
Cheers
krg,
how do we know that c has failed? it might still be going on.
Piyush: Agreed. quite possible that C is still on.. I only mentioned the chance of it having been completed becos of the 4770-5124 move and the subsequent (so far) running correction. Confirmation would have to come from an upmove larger than 4695-5630 in lesser time ... In fact as per one of alternate counts, major B could still be on or may have got over at 5630 !!
Cheers
ok krg.
@Piyush ,
May be neo is advanced than traditional EW but the old one serves me the purpose of knowing the probabilities and their invalidations .Along with other classical TA tools its enough . Rather than going into neo I will like to improve trading skills as of now.
I have nowhere mentioned major C as a part of flat . Its taken as C of Triangle of 4th in "alternate" monthly chart counts.So no question of its failure etc.
Though the major C continuing now is a valid probability with marked C in chart as only A of C and move later as wave B of C till now,(so we may now be in C-B-C-4 as per it from 4770 ).This B-C may be a flat if closes above UTL to tgt 5900 apprx. or may even end as a Traingle in ABCDE if resisted at UTL .
Many valid probabilities in long term!!!
rv
failure part of flat was mentioned by shailesh & krg earlier. so i was analysing it in light of ew.
even if we consider a triangle
a and c shud have 0.618 relationship, if not c and e shud have 0618 relationship so if 6338-4531 is c after d there shud be 1120 point fall. what i understand from pretcher
Piyush/AarVee: One query. I thought that for Pretcher and the traditional EW, anything other than basic rules, including fibonacci are broad guidelines;not neccessary conditions. Do you get the impression otherwise?
Cheers
@krg
they are guidelines but guidelines shud be followed isnt it. when one goes to neo one follows in detail and in ew one says only 3 rules else just a guideline. elliott didnt make guidelines to read and forget.
having said that i dont any long experience to say that i have seen with my eyes guidelines work but when written we shud follow it
fibonacchi relationships and golden ratios, ratios between waves are pillars of ew. if we ignore it and just label based on form we'll always have 4 labels on our charts. having given so much lecture i am just a kid who hasnt started labelling yet :-)
Hi guys.Nice to see you all commenting on the markets in such a vociferous way.Glad to see the different opinions but i dont think anyone of that is panning out even though the targets like shailesh has mentioned are very much on the cards that is 5137 on nifty but after we touch 5380-5410++ possibly by friday this week.The fall after that should take us back to 5137 and then as shailesh mentions we will see a breakout and nifty should easily touchbase with 5800-5900 levels by Sept? I have no idea about diametric and prefer to follow the traditional methods like arrvee which i think are much more superior and less intricate.Interestingly looks like both the methods point to 5800-5900 levels coming up .First 5400 kind of levels then 5137 or so and then a sharp rally towards 5800-5900.
This presentation of yours is by far the BEST i have seen from you.Simply superb, crisp and clear.Excellent!!!!
@Piyush ,
If its a triangle should not cross the long term red trendline as in charts. Then if u check c from 4770=61.8% apprx.of a from 4530. provided it ends now.Just a probability.
@KRG ,
Its right that traditional EW has only the three hard rules and broad guidelines for impulse and correctives . U think neo freezes all the market conditions in hard rules ?
@karthikg ,
Thanks for the comment . Do remember that no method is superior than other and its the person trading the method makes it what it is .Each has its own merits and constraints.and each trader should choose trading methods as per his comfort.
Some probabilities are put forward here and going to 5800-5900 is one of them ,I would like to see it breaking out above red trendline for this to fulfil as mentioned above in the post .Nothing is cast in stone in the markets ,only probabilities to be traded with proper trading principles.
Cheers !!!
Looks like 5137 is coming up now by july 18-19 and then a very very sharp rally towards 5800-5900.
@Arvee yes agreed its the trader that matters and how they use and apply any theories.One thing though i can appreciate from neo is the timing aspect which traditional methods dont lay any emphasis on and is very difficult to estimate.Maybe Neo wave can fill that gap.
AarVee: Yes. Neo has lot of hard rules and thats why it is difficult to practice real time... But I think Neely himself is more flexible on the structure, price targets and fibonacci than it appears. However, as karthikg says, his updates seem to give lot of importance to time as compared to his treatment in MEW. This is only an impression becos MEW itself is old and he seems to have added more. You can try "magic and logic of eliott waves" by Hemant Kale; think it is a good primer for neo.... Hopefully I will try to make a post on what I like in neo-wave and where it has improved on the traditional EW...
Cheers
@shailesh can you tell me the logic for 18-19 july timeframe for the sharp rally to start? My models show a very very fast rally from 5150 kind of levels or even before that but time is something i find very difficult to estimate.Can you please frame the logic for 18-19 july and not before that for the rally?
rv i was talking abt large abcde from jan 2008 what i understand from ur reply is its abt abc frm 4531 i guess , i reread pretcher,frm jan 2008 if its a triangle 2 of the pair shud have .618 relationship
ac, ce, bd
@KRG,
Thanks for sharing the resource. Is the ebook available with u of the title mentioned above ? Looking fwd to ur post .
@Piyush ,
Yes the theory says so about the triangle pattern as u have mentioned.
Could the correction stop midway and reverse with a vengeance towards 5800? I think there is a chance of that happening and the correction might be over even before 5137.Monday should unravel the mystery.
Aar Vee: Posted a piece on neowave.
I only have a hard copy of Kale's book. It is easily avlble (in Mumbai at least) and not costly
Shailesh: pls look at my neo-wave post and provide comments. Also pls revert on the two queries as above on the 18th July timing
Cheers
Dear RV!
Its really nice to see discussion of you all EW intellectuals. Thanx a lot for giving this viewing opportunity to novice like me by giving a wonderful post. I am keenly awaiting your next post, hope you will consider my request soon.
Regards,
Kumar
@ KRG ,
Thanks for the post at ur blog . Very nicely compiled. Should keep it updating with further finer points.
@Kumarji ,
EW intellectuals ?? sab student hein , rangebound market mein timepass kar rahien hein .
Cheers
Looks like 5137 is coming up now by july 18-19 and then a very very sharp rally towards 5800-5900. @Arvee yes agreed its the trader that matters and how they use and apply any theories.One thing though i can appreciate from neo is the timing aspect which traditional methods dont lay any emphasis on and is very difficult to estimate.Maybe Neo wave can fill that gap.
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