01 August 2012: Nifty Elliott wave analysis: If it sustain above 5228 then it can take a move towards 5258 < 5279. Technical support – 5190 > 5150

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

Today’s outlook: -

It was firstly hope of reform that took Nifty towards 5340 levels. When it died then it was hope of stimulus in Europe that saved market. Now we have Fed meeting today and ECB tomorrow. These are assumed as the last one and it will dominate the trend. Take a note that we are still directionless and living in full of uncertainty.

It will be known as most unreliable rise if comes. It is true that charts are indicating for a move towards 5260 and then 5279 levels. It can also be concluded that 5190 will act as important intraday support. Trend reversal support will be at 5150 levels only.

It is interesting to see what Fed and ECB will do now. Germany is not looking comfortable in supporting ECB expectation. I am still saying those central governments are just trying to save stock market while they should have tried to do something for economy.

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.