26 October 2012: Nifty Elliott wave analysis: We spend whole October month series in 100 points of range and still no conclusive direction. Hope to get something today?

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

Today’s outlook: -

Nifty has definitely irritated most of you in past three weeks of trades. It was perhaps most meaningless expiry we have seen yesterday. One can say that even after close above 5700, we are direction less. One can be right to some extent. Today is important day in term of technical chart. We are on 15^th from the top of 5815. Most important, we are on 13^th day in 100 points of ranges on Nifty. Will it give some meaning now?

I can sense that we are just on the verge of breaking this range. I am not betting which side it will break. You can clearly see the pattern drawn on the chart. From past six trading sessions it is flat top and rising bottom formation. This is an example of contracting triangle. Do not conclude that it is a bullish sign. I have given the way contracting triangle (with flat top and rising bottom) performed most of the time.

I am accepting that I am always biased towards Elliott wave theory to get direction and I like to see this time also. What it is saying now: -

“We may come near to 5730 (without violating tops), and fall can begin anytime.” This pattern possesses meaning whenever it forms immediately after hitting a short term top. There is a small question. When everyone knows about the 5730 then market may try to misguide. In such cases also closing will not go above 5730. For intraday, Nifty will have support at 5680. If it sustain below 5680 then we may see the dip towards 5630. Opps !!! Will it hit or miss? Too be honest, I do not know yet but wave theory is giving we that we will get final breach of 5630 any day any time.

S&P 500 – When it was at 1460+, we have quoted that 1475 may remains yearly top and hence correction deserves. It came off and came at 1410. Be ready to see 1385 also in small time span. I will update more. I would be happy if Nifty also would have moved in that way.

I cannot hesitate to say that this is worse approach by Indian market.

Regards,

Praveen Kumar

www.viecapital.com