25 July ’12: Nifty Elliott wave Analysis: No matter how poor global cues are but we must look for support at 5090-5100 levels. It is last good support.

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

Today’s outlook: -

From past more than a moth Nifty is not doing much during trading hours. It is just too frustrating for intraday traders. Indian market has denied many negative global cues and even after fall of more than 200 points from high we are doing better than many other global indices.

You can say it is the optimism over reforms. Well, time is running short even for prime minister. I have a view, if reform as to come then perhaps we are at the last levels of index. Break below current levels might be an indication for ‘no reforms’.

For today,

Keep an eye on 5100-5090 levels in gap down. We must not close below those on hourly basis. I cannot conclude anything about the magnitude of fall or recovery after gap down. I have just one conclude and that is related with the above support. Let us see.

Best technical indicator of NIFTY: (You must note it) – 200 days moving average – Watch the trajectory. After 20 May 2011, it started rising from 5 June 2012only. (It was not rising even in Jan-Feb rise). So the rally continues from 5 June 2012itself.

Wave development: -

I am revising above wave plotting a little looking on current development. I marked end of wave 3 at 5194.60 and hence wave 4 is automatically revised at 5194 (raised from 5041.70). You must be remembering that I have quoted 5090 when it was saving.

Take another calculation, wave 1 = 4770.35 to 4898.95 = 128.60 points (Up)

Wave 5 has to comparable with wave 1 or wave 3.

Consider first with wave 1 – Wave 5 = 2.618* wave 1 = end up 5378. So we can say that 5378 will act as tougher hurdle to cross.

Wave 5 may move in accordance with wave 3. If we see the beginning of wave 3, it was already suggesting for strong up move. Advance and cross over of 5343 will have two important figures, one is 5378 and then 1.618 times from the beginning of wave 2, i.e. 5409.

So you should look for 5343 as first hurdle and 5378 as second hurdle. Wave theory suggests that fifth wave advance can continue till 5343 but I am doubtful about 5378. Although I should not close any views completely so I will keep 5496 in my studies.

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Praveen Kumar

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