You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Nifty has slipped after hitting a high
at 5448.60 levels. I have already quoted that it may try to take a move toward
5450 if stand above 5400. Well, now we need to focus on what is going to happen
next?
I have also quoted that current rise
would be ‘unreliable’. Look at global market. US India
Elliott waves are turning very
critical now. You can able to see that now every single wave is contracting in
nature. First rising wave started form 4531 has a life for 1100 points, and
then next rising wave started from 4770 and has a life for 580 points.
Next rising wave started from 5032 and has a life for 418 points only.
This kind of contraction is
indicating that everything is not right in stock market. Although I cannot
specifically point out what is wrong but charts are telling me that current
wave formation can result a massive dip. When will it start? We will get those
answers very soon. Who knows it might have already started.
For today, break below 5390 will
give you levels of 5340 levels. I am strongly criticizing the way government is
moving with its economic polices. That inactivity may cost a lot to stock price
in coming days, weeks and months.
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+.
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Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
