You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
I have already expressed the importance
of 5340 earlier also, hope you remember. We came back to those levels once it
broke 5400. It was fully expected move. Technical charts are suggesting that
break below 5340 will give us the levels of 5290. One should look at above
chart to understand Fibonacci supports.
On higher side, no levels can make
this market safer. I am assuming that 5380 and 5400 will act as stiff trading
resistances. We need to understand the geo-political situation too apart from
technical charts. Many leading global market is trading with almost lowest
volume of year 2012.
I have already expressed my concerns
over absence of reform. Our market will bound to fall if policy makers fail to
give some boost up dose to the economy. It is a national shame to see the way things
are developing in parliament. Firstly a bigger scam then demands of resignation
and then denial of resignation. Whatever is happening in the ‘name of politics’,
those will make much bigger impact to stock market in long run. We are far far
away from improvement.
The way coal blocks have allocated, I
just remember a phrase when I was in school days, “ram naam ki loot hai, lot
sake tou lut”. I feel sorry to that parliament is not doing its work. I am not
blaming any single political parties, all are equally responsible. If I am
saying this then it means that perhaps we are living on the sharp edge for the “VERTICAL
DIP” in Indian economy. I am not more than a drawing room analyst but I have
successfully forecasted for the fall in Indian GDP toward 5% long back by
January 2012.
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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Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
