On 5th November 2010, we have seen a intraday high point of 6338.50 on NIFTY. We are now at 23rd sub wave as defined in Elliott wave chart given below. Crucial point is at the latest 3rd wave which has end point at 4720. It was also a most talked level in past 3-4 months back but unfortunately broken on 23rd November 2011. Result came as a new 52 week low at 4531 which was tested on 20 December 2011. It’s very clear that we are rapidly breaking the supports in the second half of years 2011.
I can say that from 2 nd May 2011, it was very clear that Nifty could have some painful second half and it was the time when it has broken the major daily trend line to refuse the recovery.
Whats the expectation from current levels of 4646?
From 20th December 2011, recovery sustain only for six trading sessions. If we make a trend line using the low of each six days then we can conclude that on very 7th days it has broken those rising pattern. Yesterday we got some brutal sell off for the confirmation of the decisive break. I am concluding that if nifty breaks and sustain below 4639-4630 levels then we will go to retest the recent low of 4531 very soon. This we can name as the extension of 5th wave on downside.
Technical Analysis, charting or Elliott wave, nothing is sufficient alone to get a trading direction.
RSI - I choose RSI with two suitable moving averages to smooth the chart. Indicator is suggesting that we must be near to running short of steam to run with recovery. I am expecting some decisive downside if RSI comes down from those triangle pattern.
Trend line - Look at the right side of the chart. It is indicating that in coming few days we will see the meeting of two support lines and one resistance line. This can happen somewhere near to 4464 on nifty.
There are chances for good downside in the month of January 2012. Technical are indicating for a poor show to begin 2012.
Do you know ?
For year 2011
DOW JONES - gained nearly 6%
FTSE - gained nealy 2%
NIFTY - lost more than 20%
Which economy is slowing down?
Thanks for reading,
Praveen Kumar
(Technical Analyst, www.viecapital.com)
