You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Nifty took support at 5371. It was
exactly the midpoint of assumed fifth wave which has beginning point at 5294
and high at 5448.60. It was flip flop talk about stimulus in US stimulus
package, one day hope rises and next day fed away.
We may see some higher beginning but
rise will cause choppy moves only. It may not generate good trading
opportunity. I like to add that if by any chance nifty slips below 5371-5369
then we can see a dip towards 5340 levels.
Most of the market men were having
higher hopes for reforms from monsoon session of parliament but nothing is
coming. Politics is busy with demand of prime ministers and denial. Parliament
gets adjourned every day without work.
Stock market is still in wait and
watch mode but I am repeating again, ‘nothing will come out’. They are busy in
handling the allegation of corruption. There are more politics and less concern
about economy.
There are few important resistances
for global indices. Resistances for few indices are as follow – S&P 500 @
1425, DOWJONES @ 13340 and DAX @ 7160. These indices are near to its
resistances. We may see indices moving here and there. It will be silent week
for the first half.
Wave development: -
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.
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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Thanks & Regards,
Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
