You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Nifty has successfully crossed 5378
in the last trading session. Unfortunately, global market is turning on silent
note and creating doubt over further expansion of rise. Well, but charts are
still suggesting for a rise. It will be a rise that can be impressive for
traders. I have already expressed by views for a move towards 5526 earlier.
Wave charts are suggesting that if
we send time above 5378 then we will have few likely targets. Those can be 5400
and then 5450. I am expecting a trading support at 5350 levels. There may trend
dictating stocks. One should focus towards performing index heavy weight
stocks. It is equally true that frequent weakness can it weak stocks time to
time.
Now let us talk about reforms in
India. I have already quoted that I am not expecting anything from current
government. They are showing class of inactiveness. It was reflected in prime
minister’s speech. He still believes for unrealistic growth. If you are
cheering from lowered inflation data then I must tell you that those data has
higher reasons to be worried.
I am repeating once again that if
government fails to lower fiscal deficit then we are moving towards real
serious troubles. We can enjoy the rise in indices and stock price as long as
money flow continues but some days above factor will come into action.
Wave development: -
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 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+.
Our intraday update will begin from
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