02 August 2012: Nifty Elliott wave analysis: Nifty remains alive for critical levels of 5258 & 5279 with support at 5190. Fed disappointed and now its super Mario’s turn.

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

Today’s outlook: -

Above chart is showing that ‘c’ wave has a leg at 5031 and then a bounce. We have retraced almost whole ‘c’ wave in current rise. There is a gap formation from 5300 to 5240. We have resistance at 5279. Cross above 5280 might initiate for gap fill. Any violation of top of wave ‘c’ might push Nifty higher.  

I am already criticizing central banks for created unnecessary hopes for the market. Finally fed also has disappointed. Now it is turn for ECB. If ECB disappointed then global market will see huge reaction.

Central banks – “Keep making promises and keep shifting dates.” Stock Market across the globe is too soft to react with that odd optimism which has only political agenda.

Wave support for Nifty can emerge at 5190 and break below 5190 will be the confirmation of fall. Today’s close will be important. We have already passed five days from 5031.  

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.