27 September 2012: Nifty Elliott wave analysis: Three soft trading days before expiry will make this market volatile. Range 5638 to 5676 – Break of any side will give favorable direction in that side. Note – troubles emerging in European market.

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

Today’s outlook: -

Three soft trading days before expiry is enough to misguide traders. Best thing that one can apply is to pick a range of no trade. Those ranges are looking like 5676 to 5638. Break below 5638 will give fall of nearly 40-50 points. In alter way; cross of 5676 on higher side will generate possibility of moves towards 5700-5720. If nothing happening during trading hours then prefer to be silent.

One needs to observe the formation of ‘flag pattern’ due to three days of choppy movements. General study suggest that break of higher side of those flag pattern can give rise. Similarly, break of low will give fall. Break below 5638 will give us 5620 first. Suppose if it breaks 5620 then things will turn painful. We may see the beginning of selling from these top one it breaks 5620.

Well, those were technical and now let us see some crucial development.

1. Chinese market is almost at 3.5 year’s low.
2. Supreme Court will give its verdict on natural resources. This event will be watched by corporate India very closely.
3. Spanish 10 year bond yield has closed 6% higher yesterday. Is this the beginning of fresh ‘debt crisis’ in European market? If it is coming then we must note that those will come after all ECB efforts. We must also note that there are chances that Greece may not get further bailout fund as they are failing to reduce expenses due to heavy protest. So with current reserve, Greece may default in just few weeks.

European drama is more concerning that anything else for equity market. Mario Draghi has released the ‘unlimited bond buying’ program. Just think that even after that Spanish 10 year bond yield raised by 6% in a day. I have already shown enough doubt when market were enjoying after ECB announcement. Let us see today. I am sensing huge – huge trouble for European market if not sooner than later.  

Wave development: -

On 20 September - There is another factor which I cannot ignore with Elliott wave marking. It is a shooting inflation. Suppose if we break 5449 trigger point with some ‘concerning data’ from inflation front then also we will see opening for down wave. We need to prepare for those. Watch out for support at 5525 and then at 5449. 

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+.

Our intraday update will begin from 9:30 am onwards and this article will be updated every hours. Do visit again at www.viecapital.com

(If you think that other readers should also read this article then recommend this on google by clicking g+ link given below).

Read www.viecapital.com for stocks views

Follow us on twitter a/c 'viecapital' to get intraday updates. Link – www.twitter.com/viecapital

Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

Mobile number – 09893369889

26 September 2012: Nifty Elliott wave analysis: Break below 5650 will give a fall on Nifty towards 5620 first and then it may see panic low towards 5600 levels. Stiff technical resistance will be at 5720 levels.

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

Today’s outlook: -

I said, “First bad news will be the end of good news”. It is to be applied to Indian market as well as global market. We have seen fresh growth concern in European market. I have already said earlier also that ‘unlimited bond buying program’ does not have any great meaning. Now Spain is in trouble. We must note that most of European and American markets are not moving as people were expecting it to move after break out.

Nifty has also formed a blow out top at 5720 and now it has some intraday to short term decisive point at 5650. Suppose, if it breaks 5650 then we can expect a dip towards 5620 and then 5600 also. Nifty has two crucial resistances, one is at 5707 (1.618 times of wave A, explained in earlier article) and next is at 5720. Most important thing is that we need to see break below 5650.

Next thing that market may like to focus is coming from political front. Although it seems that there is great threat for government but tussle has seen between Congress and NCP. Reason of tussle is so unhealthy. I learned that there was another scam called ‘irrigation scam’ in Maharashtra. Government spend 72 k crs and able to push ‘irrigation land’ by 0.1%. It is a shame. I do not know the political stunts but I can see those in their own data. Is this why government wants FDI. Do you think that money will come? Do note that this scam broke from a place where 54000 farmers have committed in past 10 years. In this kind of scenario, you can not expect foreign money to come.

Suppose, if we fail to get FDI then what can you say about reforms? A cosmetic reform? First, government must try to improve the environment for investment. Else, no one can save us from a possible down grade. Our GDP may slip below 5% marks very soon. 

Wave development: -

On 20 September - There is another factor which I cannot ignore with Elliott wave marking. It is a shooting inflation. Suppose if we break 5449 trigger point with some ‘concerning data’ from inflation front then also we will see opening for down wave. We need to prepare for those. Watch out for support at 5525 and then at 5449. 

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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. 

25 September 2012: Nifty Elliott wave analysis: First bad news for this market will be the stop of good news. Wave theory is suggesting that 5720 will be important resistance for short term. No great confirmation for fall yet.

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

Today’s outlook: -

Yesterday, I have discussed about the negative divergence on RSI. It is still running but I must say that this kind of divergence is time bound. We for first negative close yesterday. What all we need is another negative close. Weakness of RSI can be fruitful we manage to close below 5650. On higher side 5720 will act as stiff trading resistance.

As of now, it is not indicating for immediate fall. European markets as well as American market are also on pause but we have not yet seen any great selling. There are fresh concerns coming on European market. Question will be asked on ECB decision and QE 3 as well. It is completely true that none of the economy data is giving anything for improvement. That’s why I said, “Stop of good news will be first bad news”.

Stock market all across the world has moved sharper after ECB decision and QE 3 but results will not be fruitful. Key for all such decisions is having a basic concept and that concept is itself doubtful. How can higher stock price generate jobs?

What should be done to come out of this kind of mess in economy? In my view, governments need to generate job. (I am saying about all countries). It can never be a good idea that everything has left on private players. Monetary easing or QE 3, these are just a charity for corporate. We may have more adverse impact. Just think that if they fail after such big steps.

24 September 2012: Nifty Elliott wave analysis: Rise will continue as long as ‘reforms’ announcement runs. RSI is indicating to form a top in 2-3 days of time if we fail to make higher tops. Market is expecting more such announcement

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

Today’s outlook: -

First thing to watch on the chart is the ‘negative divergence’ on RSI on daily chart. It is giving me a sense that rise may sustain for 2-3 days at the max. There are few limitations for this study. If I make a wave count as A-B-C then, Friday’s high was close to 1.618 times of wave A. generally it can be a sign of completion of wave cycle. So rise above 5720 will initiate a new wave cycle which can have potential to push Nifty towards the 6100 levels. Will it be that easy with 5.5% GDP?

Perhaps, those concerns are reflecting on RSI on Nifty. Well, but same RSI is giving some different sign on baking index. Market is rising on ‘reform hopes’. Now, this market will keep on rising as long as we kept on getting those kinds of announcements. I am strongly saying that sudden hike in Diesel price hike and FDI decision should not be taken as guarantee of revival in economy. Those are just not sufficient. I still think that our economy has entered in trouble zone. Do you know that government of India has six fold its expenditure in last four years, which has nothing to do with subsidy and FDI? I am sure that rating agencies will not pleased the way market is thinking. Although, I do not want to give any great value to rating agencies, they are always biased and keeping Indian economy underrated.

Right now, market is expecting 49% FDI in insurance, FDI in pension, new company act, land acquisition bill, power reforms. List is so long. There are talks on some hard decision on sugar price too. I am afraid that quicker decisions are giving higher threat of much higher inflation.

Wave development: -

On 20 September - There is another factor which I cannot ignore with Elliott wave marking. It is a shooting inflation. Suppose if we break 5449 trigger point with some ‘concerning data’ from inflation front then also we will see opening for down wave. We need to prepare for those. Watch out for support at 5525 and then at 5449.  

21 September 2012: Nifty Elliott wave analysis: I am repeating again for the support at 5525 levels. If it breaks then only we can hope for further fall. It is a twist between ‘reforms’ vs ‘stability’.

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

Today’s outlook: -

Today is the day which is very important for political development. TMC ministers are going to submit their resignation. Government of India has issued notification on FDI in retail. There are fresh talks that government may hike FDI limit in insurance. Too fast is too dangerous. I strongly believe that ‘cost of stability’ is much bigger than ‘cost of these so called reforms’. I may go wrong if things go stable. There are massive hopes that market may shoot up massive once politics goes silent mode. Well, but if things goes wrong then it will open much bigger possibility of historic fall. Do take a note that our economy is at a situation where we cannot able to bear the expenses of ‘mid term poll’. It will be a disaster.

Elliott waves are suggesting for strong support at 5449 levels. Those supports are roughly 100 points away due to some bigger gap up in past few days of trades. Even for intraday, we will have trading support at 5525 levels. As long as it is saving 5525 we cannot hope for bigger cut immediately.

On higher side Nifty will have trading resistance at 5600 levels. I strongly believe that our nation need reforms but it must come in a proper way. Even foreign people will see those bills with doubt if those are passed without good political consensus. So far, charts are not giving any great sign of fall. Things can change anytime for bulls and bears. I say, watch out for TMC minister’s resignation and SP moves on supports.  

Wave development: -

On 20 September - There is another factor which I cannot ignore with Elliott wave marking. It is a shooting inflation. Suppose if we break 5449 trigger point with some ‘concerning data’ from inflation front then also we will see opening for down wave. We need to prepare for those. Watch out for support at 5525 and then at 5449.  

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+.

Our intraday update will begin from 9:30 am onwards and this article will be updated every hours. Do visit again at www.viecapital.com

20 September 2012: Nifty Elliott wave analysis: It will take out support of 5584 in gap down. Break below 5525 will intensify the fall due to political heat. Final support for wave trend reversal is at 5449.

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

Today’s outlook: -

I have already suspected if Dr. Manmohan Singh was showing courage or doing adventure. Finally, it seems that he has taken some big risk for some ‘reforms’. I must say that in a democratic nation, one has a compulsion to move with step wise consensus. If he would have initiated these processes of reforms earlier (near 2-3 years back) then we would not be in this situation. So, I am concluding that it is a repercussion of phase of policy paralysis. He took ‘right step’ in a ‘wrong way’.

I am issuing a strong warning that any roll back in the process of reforms can back fire stock market in a wild way. You can say, that if rollback does not come then this government may fall. Well, Dr. Manmohan Singh has put himself in this situation. I fail to understand why to give importance to rating agencies so much. They are already very unfair with India’s rating. There are countries at Europe who are enjoying much better rating with extremely poor fundamental.

Elliott wave reversal will come at 5449. For today, market may open at 5550 levels. Then, immediate technical support will emerge at 5525 levels. Any adverse news flow on political front may put us on challenging fall. On political concerns, our market can fall as big as 10% from current levels.

There is another factor which I cannot ignore with Elliott wave marking. It is a shooting inflation. Suppose if we break 5449 trigger point with some ‘concerning data’ from inflation front then also we will see opening for down wave. We need to prepare for those. Watch out for support at 5525 and then at 5449.  

18 September 2012: Nifty Elliott wave analysis: Move came from 5215 to 5652 with more than 50% rise as gap up so consolidation required. Break below 5584 will give first sign of profit taking. Resistance will remains above 5652.

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

Today’s outlook: -

It was expected to test 5640 and it has done. A big ticket reforms gave only 32 points of rise on Nifty as market it already sensing that it is only initial few steps. It is also true that these reforms have lots of political agitation. For today, we have to watch on political front where Mamta Banergee will declare her actions. I doubt if she can able to take any action which can be a threat for political stability. Well, those are really unpredictable.

Technical charts are suggesting that we have entered in the zone of long term resistances. One can conclude that cross over of these levels will give us another massive move on higher side. Is it really coming? Global development or domestic data, none is confirming for higher stock price. Our market looks expensive.

There are some doubts and concerns coming again in US market as well as European market. There are some discussions on QE 3. UD fed believes that higher stock price can generate jobs which might not be a good concept to believe. When Dow Jones was at 13500 last time, jobless claims were 4.70%, now when Dow Jones is again at 13500, jobless claim is 8.10%.

I am not saying that market will react immediately from current levels but I am strongly saying that rise will not sustain for long. Equally, there is no big point to buy stocks for short to medium term. I like to see the improvement in economy data. It may take long time.

For NIFTY, break below 5584 will be first sign of profit taking. It can turn weak if it breaks 5526 levels. Suppose, if Nifty sustain below 5526 then we can expect fall towards 5449 levels.

Wave development: -

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+.

Our intraday update will begin from 9:30 am onwards and this article will be updated every hours. Do visit again at www.viecapital.com

(If you think that other readers should also read this article then recommend this on google by clicking g+ link given below).

Read www.viecapital.com for stocks views

Follow us on twitter a/c 'viecapital' to get intraday updates. Link – www.twitter.com/viecapital

Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

Mobile number – 09893369889

17 September 2012: Nifty Elliott wave analysis: It will be third gap up in nine days. This kind of gap up is too dangerous even for bulls. “The boosted reforms” by Dr. ManMohan Singh will push stock price higher. RBI monetary policy review and Political development will be more important today after opening.

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

Today’s outlook: -

Stock market has waited for many years for reforms and it came on Friday evening in much unexpected ways. Dr. Manmohan Singh has taken a bigger risk of ‘political instability’ in a coalition politics. No matter how big ‘oppositions’ and ‘coalition partners’ are opposing but until they really brings ‘no confidence motion’, this government will have no threat. Every move was calculated. Opposition of FDI and Diesel price hikes are just looking as political drama. Till yesterday, people were presenting themselves as they are going to withdraw support but suddenly all are changing their words. These are politics of opportunity and no one can predict them.

On technical charts are we are going to see third 60-70 points of gap up. With today’s gap up, it will be full 270-280 points of gap out of 400 points of rise. This is too much to say about any single degree of safety. I can say that those policies related decision will not change economy related data so soon. We are still living on the big threat of higher inflation. Those decisions will take 6-8 months of time to show its effects. This kind of rise can end up with ‘blow up top’. I can tell you that ‘blow up top’ come with extreme optimism. We may have RBI credit policy review today. It seems that some positive would be factored it with optimistic rise.

So, after another gap up, no deal to trade long. If you want to trade long then maintain some suitable stoploss to maintain risk/reward ratio. I am expecting a test of 5640. Let us see if it crosses.

Wave development: -

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+. 

14 September 2012: Nifty Elliott wave analysis: It is going to be second gap up within past eight days. 5449 will cross in Gap up to generate the target at 5526. It is ‘reverse H&S’ target which has generated in the last month of trades.

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

Today’s outlook: -

If Mario Dradhi came with a word ‘unlimited’ then Ben Barnanke goes one step ahead and used two words, ‘unlimited’ and ‘open ended’. I was at all expecting this kind of reaction by market. Secondly, we have seen hike in Diesel price by rupees five per liter. It was so far so big day. It is going to result another ‘100 points’ gap up for second times in past eight trading sessions. Technically, it is too tough to deal with.

We can say that it is going to hit 5526 as next trading resistance, which was derived earlier with ‘reverse H&S’ pattern. Technical charts are turning blind now for up move. It is looking for a move for ‘higher highs’. With today’s gap up, it will be more than 200 points of gap up out of 300 points of rebound.

Where can it stop? As it is running with ‘optimism’ and there is nothing to come now so time for silence should come after today’s euphoria. Global market is even more bullish compared to the Indian indices. It seems that government of India has also come in some different mood. I strongly believe that ‘hike in Diesel price’ came late. Impact of this hike can be 100 bps in inflation.

Let us see, how long Nifty run can after this kind of wild gap up for twice in eight days. We must note that today will be eighth day of rise.

Wave development: -

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+. 

12 September 2012: Nifty Elliott wave analysis: It is sustaining above 5378 and hence higher targets are applicable. It may try to move towards 5449 if sustain above 5400 levels. As it is dictated by optimism so the out come of those optimism will drive market trend.

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

Today’s outlook: -

The moment Nifty start trading above 5400, it will change the ‘interpretation’ of charts. There are too much news flow and too much optimism. It is difficult to make call with great confidence. Market is waiting for German court verdict over ESM, outcome of FOMC meet with bet on QE 3 and IIP data in India.

Technical analysis is the study to understand mass behaviour but now a day market direction is well governed by few events and fewer big money across the world. Charts are suggesting that cross above 5378 can give rise towards 5400 < 5420 and then 5449 too. It is for sure that it going to be wild two days ahead.

If levels like 5500- 5526has to come then it can come in coming few days only. Although, I need to accept that I was not expecting this kind of higher crossover. I was expecting this market to go back to 5215 levels. I am puzzled with this kind of optimistic rise. This kind of rise can leave one with just one direction and those are direction with liquidity. I must accept that I am not trying to be optimistic as the reason and outcome of that optimism are not good enough to say for a ‘trend’.  

In the absence of policy reforms we are bound to be laggard of global market. Look at some data, Dow Jones is at its February month’s high but we are still 5% down from same period. Still, as long as optimism sustain, this rise will see continuation. One must note that market men were expecting fuel price hike by yesterday evening. It has again failed. Government is trying to make a ‘perfect timing’ and there cannot be any perfect time for such decision.

Wave development: -

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+. 

11 September 2012: Nifty Elliott wave analysis: It is suggesting me for stiff resistance even at 5378 < 5400. Break below 5340 will trigger selling. Do not even try to buy any single PSU Banks (or any banks). Some banks might have to digest the poison of coalgate scam.

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

Today’s outlook: -

I have this earlier too. I am not ready to believe anything on bond buying program unless we get clarity on Germans move. How can you expect that those can accept the ‘black cheque program’? Now after three days, we heard some words of agitation. If I was saying that Mario Draghi is playing with the fire of stock market then I mean about this kind of steps only. He is talking beyond something which is not in his control. In fact, he is making things and pictures more complicated and unclear.

If above was euro zone concerns then I can tell you that our market has much bigger concern than those. As per media reports, some banks have to digest the poison of coal gate scams if some allocations get cancelled. We have bright chances for cancellation of some allocation. One must maintain distance from all banking stocks as you can never able to know the name in advance. When we are in this kind of environment then it is completely meaningless to talk about ‘policy reforms’. I had expressed these concerns long back. It is equally true that stock market has not yet reacted about ‘absence of policy reforms’.

Why I am so serious about coal gate scam? Well, “Coal” will become political fuel. Many sectors might get affected and then how can I neglect when I try to understand stock price.  Few big names came in radar and those people are daring to show ‘eye’ on bitter questions while they should answer. Can I invest in this kind of ‘corporate governance?” At least I will not.

You can ask for the downside beak point. I must highlight that break below 5309 will take out all those hopes that build in past 2-3 days. Charts are suggesting that market will not be comfortable even if it slip even below 5340 levels.

Wave theory is suggesting for a down wave “C”. As of now it seems that 5375 may be the beginning point of wave “C”. I must tell you that it is not confirmed yet. We need to see some close lower than 5340. I have already expressed yesterday that I am expecting the test of 5215 by this week only.

Wave development: -

On 30 August - Firstly, I have quoted for resistance at 5449-5450. I have already said that this is ‘most unreliable’ rise. You can ask for reason. Just a fair question, what was the base of this rise? Just hope and blind hope. Now we in the final count down of hopes for Indian, European and American market. I have said this in past and repeating again that policy makers are playing with the fire of stock market. They are just buying time from stock market. They will not act on their words.

Earlier in the week - Elliott waves are turning very critical now. You can able to see that now every single wave is contracting in nature. First rising wave started form 4531 has a life for 1100 points, and then next rising wave started from 4770 and has a life for 580 points. Next rising wave started from 5032 and has a life for 418 points only.

Earlier in the month - I like to add few more things for “reverse H&S”. Length of head = 5279 – 5032 = 247 points. Confirmation point will be one-third of head length i.e. 247/3 = (~) 83. It means 5279 + 83 = 5361. So we need to see the one-third confirmation rule to bet for 5526. As it is visible on daily chart so we need to see this close to close basis. (This is a “must know” concept).

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+.

Our intraday update will begin from 9:30 am onwards and this article will be updated every hours. Do visit again at www.viecapital.com

(If you think that other readers should also read this article then recommend this on google by clicking g+ link given below).

Read www.viecapital.com for stocks views

Follow us on twitter a/c 'viecapital' to get intraday updates. Link – www.twitter.com/viecapital

Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

Mobile number – 09893369889