You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
EBC decision seems to be a game
changer. Has it saved the upcoming ‘September fall’? Well, it is too early to
conclude. We will see a higher start today but I am sure that it will be silent
even at higher levels as we are having our own domestic concerns. What is my
stand on ‘new bond buying programme’? I have just one question, “Will Germen
authorities approve it?” That’s a key question and we will come to know later
on. I am still sure that Euro zone is far away from any solution.
Based on Elliott Wave, we can get a
recovery maximum till 5280-5300 levels. I can think of trading long if it tries
to sustain above 5300 on closing basis. I do not think that it is a time to buy
stocks. Risk is still too high. We may trade on long side for intraday but
biasing can change anyday anytime. It can happen today also. I suggest that one
should watch last one hour of trades very closely.
One should take a note that it is
not my feeling that market has to go down. I am concluding those based on
Elliott wave charts. I have already said this in past also when Nifty was above
5400. It slipped and current rise can just be a technical recovery coming on
news.
Indian market will have different undertones
compared to the rest part of the world. Look at ‘monsoon session’ of
parliament, those are a complete washed out.
Wave development: -
On 30 August - Firstly, I have
quoted for resistance at 5449-5450. I have already said that this is ‘most
unreliable’ rise. You can ask for reason. Just a fair question, what was the
base of this rise? Just hope and blind hope. Now we in the final count down of
hopes for Indian, European and American market. I have said this in past and
repeating again that policy makers are playing with the fire of stock market.
They are just buying time from stock market. They will not act on their words.
Earlier in the week - 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.
Earlier in the month - 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
