You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Nifty has crossed 5400. Moreover,
FII bought 141 crs and DII sold 141 crs. We have seen silence is mid cap and
small indices. Silence on broader indices might be the first indication of
tiredness of rise. I have already said that there will be no easy rise above
5400. It is completely true that technical charts are giving two targets; one
is at 5450 and then 5526. We must note that to get a fall we have to see the
failure of one resistance. Suppose if Nifty open below 5400 then story will
remain same as of past few days.
Do take a note that we are getting
one-third confirmation of ‘reverse H&S’ pattern which has target at 5526.
Big question is will we get the
pause or fall now? My answer is ‘yes’, we are close to those kind of
development. Almost all global indices are on resistance. Even US market
benchmark S&P 500 has tested 4 year’s high. Well, I have few important
levels for Nifty. For supports, watch out for 5375 and 5350 levels. We are
still having higher – high pattern so we must be careful in fall.
I am retaining my views about
stocks. It will be stock specific deals but weaker stocks will remains weak and
may fall even in consolidating market.
It will be hard to believe but we
will see the beginning of a massive bearish cycle very soon which will have a
capacity to shock everyone on the street. I will update on right time when it
will begin. As of now DOW JONES has resistance @13340, DAX has resistance
@7160, S&P 500 has resistance @ 1425.
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
9:30 am onwards and this article will be updated every hours. Do visit again at
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