You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
I have this earlier too. I am not
ready to believe anything on bond buying program unless we get clarity on
Germans move. How can you expect that those can accept the ‘black cheque
program’? Now after three days, we heard some words of agitation. If I was
saying that Mario Draghi is playing with the fire of stock market then I mean
about this kind of steps only. He is talking beyond something which is not in
his control. In fact, he is making things and pictures more complicated and
unclear.
If above was euro zone concerns then
I can tell you that our market has much bigger concern than those. As per media
reports, some banks have to digest the poison of coal gate scams if some
allocations get cancelled. We have bright chances for cancellation of some
allocation. One must maintain distance from all banking stocks as you can never
able to know the name in advance. When we are in this kind of environment then
it is completely meaningless to talk about ‘policy reforms’. I had expressed these
concerns long back. It is equally true that stock market has not yet reacted
about ‘absence of policy reforms’.
Why I am so serious about coal gate
scam? Well, “Coal” will become political fuel. Many sectors might get affected
and then how can I neglect when I try to understand stock price. Few big names came in radar and those people
are daring to show ‘eye’ on bitter questions while they should answer. Can I invest
in this kind of ‘corporate governance?” At least I will not.
You can ask for the downside beak
point. I must highlight that break below 5309 will take out all those hopes
that build in past 2-3 days. Charts are suggesting that market will not be
comfortable even if it slip even below 5340 levels.
Wave theory is suggesting for a down
wave “C”. As of now it seems that 5375 may be the beginning point of wave “C”.
I must tell you that it is not confirmed yet. We need to see some close lower
than 5340. I have already expressed yesterday that I am expecting the test of
5215 by this week only.
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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Thanks & Regards,
Praveen Kumar
Mail id – Praveen@viecapital.com
Mobile number – 09893369889
