28 June 2012: Nifty Elliott wave analysis: 5th wave may not see any great extension. 5209 should remain untested. Sell on rise, SGX is hinting for 20-25 points’ higher start. Caution on expiry day is strongly advised.

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

It was another expected dull day yesterday. Prime minister asked MoF to start with fire-bridge reforms. Will that enough to start with reforms? Looking on the history of UPA history, I am not hoping anything. These are just talk to boost the moral, nothing else.

Out come of euro summit – will again be nothing. I have lesser to believe and higher reason for ‘not’ to believe.

It is derivative expiry and we must just focus on technical charts. 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 any day any time.

For 28 June 2012 – trading strategy –

SGX is hinting for opening @ 5160+. It can give a push towards 5190 on NIFTY as well as NIFTY FUTURE. I am already saying that I am not the firm believer for the cross of 5209. So short on rise and keep stop loss @ 5209. No ‘if’, no ‘but’. Regular readers are fully aware that we were the first one to come out with importance of 5090. Look at now, everyone is talking.

In the above chart there is a charting formation, which is known as diamond chart formation. 80% of the time it favours bears. So the top of 5^th wave may/will not see extension. Even if it comes it will not see any greater extension. I will be surprised if it comes at 5250-5300.

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Praveen Kumar

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