10 August 2012: Nifty Elliott wave analysis: Waves are still suggesting for a dip towards 5278 levels to test neck line. We need to take fresh views on those levels. Global market will also see a pause.

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

Today’s outlook: -

It has seen a dip from 5368 yesterday and now it may turn decisive now. We have reverse H&S pattern on daily chart. I was calculating the advance of wave as 1-2-3-4-5 but it seems that it may convert to a-b-c only. As of now it is three wave advances. From this point we have two possibilities: -

First is, we may correct up to 5278 and then a rise to get the target of reverse H&S at 5526.

Secondly, if we break and sustain below 5278 then things might be concerning. You can say, highly concerning.

Whatever has to happen but right now it is looking for a dip towards 5278. In a weak macro economy factors, we have already seen massive rise. I like to see SBIN result today to decide main up coming trend. What is happening on oil market PSUs are also concerning. IOC presented mammoth loss figures, historical figures. Yesterday, FII bought 337 crs and DII sold 754 crs, this is showing negative views by domestic player.

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+.

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