You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
First thing to watch on the chart is
the ‘negative divergence’ on RSI on daily chart. It is giving me a sense that
rise may sustain for 2-3 days at the max. There are few limitations for this
study. If I make a wave count as A-B-C then, Friday’s high was close to 1.618
times of wave A. generally it can be a sign of completion of wave cycle. So
rise above 5720 will initiate a new wave cycle which can have potential to push
Nifty towards the 6100 levels. Will it be that easy with 5.5% GDP?
Perhaps, those concerns are
reflecting on RSI on Nifty. Well, but same RSI is giving some different sign on
baking index. Market is rising on ‘reform hopes’. Now, this market will keep on
rising as long as we kept on getting those kinds of announcements. I am
strongly saying that sudden hike in Diesel price hike and FDI decision should
not be taken as guarantee of revival in economy. Those are just not sufficient.
I still think that our economy has entered in trouble zone. Do you know that
government of India
Right now, market is expecting 49%
FDI in insurance, FDI in pension, new company act, land acquisition bill, power
reforms. List is so long. There are talks on some hard decision on sugar price
too. I am afraid that quicker decisions are giving higher threat of much higher
inflation.
Wave development: -
On 20 September - There is another
factor which I cannot ignore with Elliott wave marking. It is a shooting
inflation. Suppose if we break 5449 trigger point with some ‘concerning data’
from inflation front then also we will see opening for down wave. We need to
prepare for those. Watch out for support at 5525 and then at 5449.
