You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
It the completion of wave ‘B’ which
was corrective up and just sustain for 2 days. From Friday onwards it was the development
of wave ‘C’ which is downward in nature. I have already quoted that break below
5209 should be decisive.
Right now we are looking for the
test of 5160. If Nifty start sustaining below 5160 then we will see some major
concern as it may result the test of 5127>5118 too.
We generally know that hike in
Diesel price can be bad for stock market but this time market will fall if hike
does not come. Charts are telling us that if we start trading below 5127
anytime anyday then we will see the retest of 200 DMA which is at 5096.
I have quoted this many times in
past also that frequent test of 200 DMA is a sign of weakness.
Best technical indicator of NIFTY:
(You must note it) – 200 days moving average – Watch the trajectory. After 20
May 2011, it started rising from 5 June 2012 only. (It was not rising even in
Jan-Feb rise). So the rally continues from 5 June
2012
itself.
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 Friday’s 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.
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Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
