You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
We have a massive rally in European
and American market on Friday night. I am already criticizing politicians and
policy makers for their high-talk language on economy. After Mario Draghi now
Angela Morkel repeated the same statement that she will do everything to save
euro. This makes the market optimistic again. When globe start moving higher on
words only then why to act on words? It is a traditional political approach.
I can criticize these people but I
cannot stand my trading positions against those. I am again repeating that
European people are trying to convince on a matter which they cannot solve.
We have some greater challenges on
domestic front. Monsoon is not only turning critical but also extremely
threatening. I have already forecasted for WPI Inflation @ 11-12% and food
inflation @ 15-18% by November 2012. I am forecasting those figures from the
month of March.
For today, we will have trading
support @ 5190 and 5164. On higher side, there are few crucial levels, 5258 and
5279. Will stand above 5279? Let us see.
Wave development: -
Nifty has a low at 5032 on 27th
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 3rd 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+.
