04 April 2012- Technical Update –
As said yesterday, Nifty has stiff resistance at 5386 levels. In my yesterday's strategy it was suggested to short near NIFTY spot 5370 and keeping stop loss abve 5386 NIFTY Spot. Nifty spot has tested 5379 and slipped. Have a look at trend line, it was updated on April 2. (Read previous one).
In current wave trend - Wave has seen 4 days of fall and now it has 4 days of corrective rise on upwave to for B. Now if it misses the levels of 5386 and start drifting then we can expect the formation of wave C.
( I recieved few mails regarding wave pattern. Some has asked why am I not making 1-2-3-4-5 wave counting? Answer - till now wave patterns are distributed in 3 wave reactions. In longer run we may see the formation of 5 wave pattern but as of now it will go like 3 wave pattern.
Till now - After making a high of 5630, we have seen 8 wave formations, named as - A-B-C-A-B-C-A-B. Eacg wave is drifitng lower in current channel.
(Reversal point for bulls will be possible only if we see upper cut of 5446. I have updated 5446 earlier also).
Do take a note that you cannot put A-B-C anywhere by your choice. It must satisfy amplitude and direction with each wave.
As of now current formation is advocating for the beginning of wave 'C' for fall. Magnitudes will be calculated later. Most crucial figure to watch will be
Support - 5379 - (1.618 of 250 (from 5386 to 5136)) = 5379 - 404 = 4975
So this upcoming fall may have violent in nature. This may take sometime but 101% be cautious from buying for few days. Think to buy only if Nifty above to cross above 5446.
200 DMA - 5150- FREQUENT TEST IS GIVING A HINT THAT IT HAS TO BREAK AND TEST LEVELS MUCH BELOW THOSE. Do take a note that NIFTY is down by 6% in March in spite of $3 billion inflow by FII.
STRATEGY
*Watch out for resistance at 5379 < 5386.
* This market will act as trading - short on failure at 5370 with stop loss 5386. Note - above is NIFTY spot levels. You can add 30 premium point to get approximate NIFTY APRIL MONTH contract levels.
*Cross over of 5386 will give you 5446.
* Be cautious at higher levels.
*We have already suggested to forward short.
SGX now - 5354 = down 26 points
Regards,
Your valuable comments are always welcome to improve the study.
Praveen Kumar
Praveenji Thanks for your lucid explanation. Regards.
ReplyDeletePraveenji I have to more queries. 1) How have you arrived at 5317 figure and said that a close above it will give 1% approx. i.e 5371 and 2) How have you arrived at the resistance figure between 5370-85 and next target of 5446? Regards.
ReplyDeletePraveenji I have understood 5386 and 5446 please explain 5317 figure? Regards.
ReplyDeleteDear Sandy,
ReplyDelete5317 was generated on the day when Nifty saved 5136. Please refer to my 30 March 2012 study.
Wave W- from 5630 to 5171
Wave X- from 5171 to 5499
Wave Y- from 5499 to 5136.
50 retrecement of fall from 5499 to 5136 ~ Half of 363 = 182
Giving 5315.90 + 182 = 5137.90.
Critically cross over of 5137.90 has generated a 1% rise by two ways
1. Just less than 100% retrechment of wave A (Top was 5386/hence missed)
2. Trendline study was indicating for massive supply levels at 5380 ~ 5386
Hope it is giving you better comfort in reading charts now.
Cheers !!!
Praveen