26 June 2012: Nifty Elliott wave analysis: It is indicating for support at 5090-5080 from past so many days. As long as it holds it may try to extend fifth wave. Will it be another dull day?

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

Yesterday was perhaps the dullest day of recent time. Now we are just one day away from derivative expiry. As of now, global market took a pause in fall. We are showing better relative strength from past few days. So will that relative strength convert to bull’s power? It is interesting to see.

I must tell you the reason for no weakness in stock market - Market is expecting that upcoming one month will be important for reforms as PM is taking charge of Finance ministry. Market is hoping a lot from the father of reforms Dr. Manmohan Singh. This is the prime reason that even I do not want too short this market immediately as our market runs on hopes. (Am I optimistic? No, not at all. I am not expecting anything from this government)

There is one concern which is bigger than any anther negative cues. It is –

IMD has warned that we may have weakest south-east monsoon of past 30 years. It is perhaps due to al-nino effect. Although al nino has resulted below normal monsoon by 17 out of 40 times. Warning is still a warning. Our nation is struggling with ‘inflation’ and poor monsoon can ignite inflation anytime. (One must note that I have already forecasted by 10-11% inflation by November 2012).

For today,

            I am again repeating for support at 5090. You know from when I am giving this level. Now almost every one is talking about this support. My study will remain same. Do not short near to 5100 levels as long as 5090 hold.

On higher side cross above 5136 (quoted yesterday and it seen one dip from 5134.55) will give us 5156 and then a move towards 5190 levels (not necessarily to be tested) but may not cross 5195.

Waves 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.

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Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

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