26 June 2012: Nifty Elliott wave analysis: Read 5 wave development on charts. Baby step reforms will not help us. Government must bring more and market is still hopeful (but I am not). Support range 5090-5080.

You must read previous articles and watch above chart carefully to understand this article completely.

Important development of charts –

• Nifty has 38.20% resistance @ 5209 (from 5630 against the rise from 4531 to 5630). We have seen fall from those resistance with high @ 5191. (remain untested even after yesterday’s efforts).
• 5029 – It is 38.20% of rise against 4770 to 5191.
• 5080 – Mid point of 5631 to 4531, hence a critical support. Some retrenchment is giving 5090 also. So the range is 5090-5080 as support. 

 Nifty has crossed 5191 for few minutes yesterday and then slipped with a confirmation on chart tat 5209 is not an easy kind of resistance to cross. Thanks to baby step reform by government of India. I am sure that blind optimism will drive till next monetary policy.

With yesterday’s top I am in the position to plot this as five rising waves. I must say that no matter what is happening in domestic and global front but charts are yet having strength. Wave are as following: -

Wave 1 – 4770.35 to 4898.95 = 128.60 points (Up)

Wave 2 – 4898.95 to 4847.70 = 051.25 points (Corrective down)

Wave 3 – 4847.70 to 5190.20 = 324.50 points (Up)

Wave 4 – 5190.20 to 5041.70 = 148.50 points (Corrective down)

Wave 5 – 5041.70 to 5194.60 = 152.90 points (Up)

(Wave 3) = 2.525* (wave 1) ~ 2.618*(wave 1) – This is key to plot this five wave. You cannot plot anywhere you want. You cannot violate basic rules to plot waves. This is most correct wave plotting in my view.

More over,

(Wave 5) ~ > (wave 1) – a required condition

Break and trade below 5080 will surely push us lower today.

I have said that as long as 5090 sustain we can expect the extension towards 5209 or closer. I have considered that yesterday’s move was just one of that attempts which failed.

Now for today –

Once again keep an eye on 5090-5080 as support. If it breaks then we will see fall towards 5029 and then perhaps break of 5000 psychological mark.

On higher side 5136 will be a tougher resistance to cross. Few days back I said that above 5100, it is a sell-on-rise market. What we are getting is just the confirmation of that. It is not easy to stand or taking short in even flows.

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Praveen Kumar

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