You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
It has broken 5340 and sustained
below that for the majority of the trading hours yesterday. It is signaling that
market is close to show further weakness. One must note that mid cap and small
cap indices are performing worse than blue chip indices. I must tell you that
this kind of phenomenon is the sign that either we are going to form a short
term top of long term top. Whatever is the case but it is clear that this
market is at least going to see a dip which is going to continue for few
days/weeks.
Technical levels that can act as
immediate support will be at 5290. Break of 5290 will be an opening for the
further fall towards 5240 levels too. On higher side you can expect two
intraday resistances; one is at 5350 itself and other at 5371.
You can ask if it can change
anything above 5371. Well, my answer remains same. No matter what kind of
recovery comes in the market but fall is unavoidable. Do take a note that most
of global indices are trading with extremely thin volume.
It is only the choppy movements in
the market which is making short trades uncomfortable. Actually, now a day
every trades demand little time domination. So give some time to your trades. Take
a position and try to stick with those for few days.
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+.
Our intraday update will begin from
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Thanks & Regards,
Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
