08 August 2012: Nifty Elliott wave analysis: It came at 5350 now. We may get some correction from higher levels but it may not violate the trend. Day by day it is getting better confirmation of reverse H&S pattern.

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

Today’s outlook: -

We have two crucial quarterly results ahead, one is TATASTEEL and other is SBIN. Do not conclude the reverse H&S pattern can give straight line rise as the way we are moving now. Correction is integral part of trading. Charts are suggesting that if we manage to sustain above 5350 then we may see levels of 5378 < 5400 levels. I am not expecting easy rise above 5400.

Even if correction comes then also we may not violate support of 5279-5270 which is n-line of reverse H&S pattern. Do take a note that we have final target of 5526 which I am mentioning from past few days of trades.

We must focus on technology and reality stocks for trades at higher levels but every single trade requires caution of volatility. I am expecting and wanting a correction to get a dip near 5280 to buy. Will I get?

I am not a big optimistic person in term of policy making. India, Europe or USA, story will remain same. Until and unless it comes, I am not going to believe. Let those come but it is for sure that many is strongly hoping for the same.

Wave development: -

Nifty has a low at 5032 on 27^th July 2012. As of now we can sense that there is a beginning of new wave which probably is going to be a rising wave. Take a note that we have seen a completion of up wave which has started from 4770. It is named as 1-2-3-4-5-a-b-c in above chart. On 3^rd August 2012, we got a low of 5164.65 which is exactly 38.20% against the rise from 5032 to 5246.

This is encouraging with few challenges on higher side. Every wave trend has some relation with its previous wave or waves in terms of ratio. I myself have said that this is going to be most unreliable rise looking the reason of rise but when I have to work with charts then I am forced to keep those away. I can tell you that charts are still saying that I am not wrong in a big way. Magnitude of upcoming wave will be lesser compared to past few waves.

Charts are saying that if we manage to close above 5279 then we can conclude for the formation of ‘reverse head and shoulder’ pattern. It will have n line @ 5279. You can say for the rise which should be equal to 5279 – 5232 = 247 points. It can give me a target of 5526. Well, it is looking easy but it will not be easy. We can say,

Beginning point of wave = 5032.40

Wave 1 = 5246.35

Wave 2 = 0.318 times of wave 1 = 0.318 times of (5246.35-5032.40) = 5164.65

Those who are bullish in their nature should keep their fingers cross for 5279+.