You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Yesterday, I have explained the
importance of close above 5279 levels. We have seen a close above those levels
but only just above. So it is very important to get a follow up buying. I am
hoping to get that. We have some massive buy figures coming from FII side. We
can make a debate over an issue that how long can those investment continue
with current pace.
My first duty is to forecast the
levels rather than reason. We will surely see a fall in coming days (may be
weeks) but right we are sensing only for a rise. It is a reverse H&S
pattern which can trigger buying for coming few days more. For today’s trade, I
suggest for trading support @ 5250. On higher side as long we hold above 5279
we can expect gain above 5300 levels. Once it stands above 5300 then we can see
an attempt towards 5350 levels.
Technical support will be at
5257>5245. If by any reason Nifty stand below these levels then give up long
trades and positions. We must be careful for confirmation of reverse H&S
pattern. It is very important too see few more closes above 5279.
Doubts began to build the European
Central Bank will rush to roll out a bond purchasing program to lower borrowing
costs in Spain and Italy despite German approval for the program. Who can stop
European policy makers and politicians?
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+.
