30 July 2012: Nifty Elliott wave analysis: Even after gap up, 5150 may remain tough – tough resistance to cross. PSU banks are ready for more massive slide.

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

Today’s outlook: -

I have already said that central banks across the globe are playing with fire of stock market. Now DOW JONES is above 13000 levels. I am not going to change my views towards Indian market. This week will be the litmus test of stimulus hopes and stimulus bulls.

If Nifty fails to cross above 5150 then we will see support at 5075. Break below 5075 will create panic test of 5040 > 5015 levels. Cross over of 5152 will result the test of 5192. You can watch the above chart to see the retrenchments.

Do not touch for buy on any single PSU banks in temptation. There can be some further massive slide. There is something wrong. I have already warned about PSU banks many times in past too.

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 2012 only. (It was not rising even in Jan-Feb rise). So the rally continues from 5 June 2012 itself.

Wave development: -

First view is wave c = 1.618* a = 5343 (Already stated on Friday too in my intraday updates.

Second view is wave c =2.618* a = 5496 (Things can never be so simple in stock market as it looks on charts.)

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.

Let us explain with Wave 3 – 4847.70 to 5194.65 = 329 points (Up)

76.40 % rise from 5041.70 of wave 3 = 5288, which was roughly the high point of previous day trade.

I like to add one more point. This rally is running from 4770. From a top you need to put support at 38.20% as reversal point. Previously it was coming at 5029, now it is coming at 5090-5100 levels. Now, support if we see a high at 5343 then 38.20% will come @ 5125.

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.