You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
I said that 5630 is now ‘make or
break’ levels. Few days back also I quoted that Nifty is bound to see pullback
as long as it is saving 5630 levels. From higher levels, if it fails to sustain
above 5730, we are bound to see selling. We can conclude that actions has
restricted in 100 points of range from last eight trading session. I need to be
honest that it is not easy to take directional call in this kind of market. Those
are officially confirmed by charting pattern. Those who know technical must be
aware about “W” pattern. I am explaining also. Some can name it as double –
bottom and triple-top pattern. Bears took two attempts to for tow lows and
bulls put three attempts for three top but both failed. Simple rule of technical
analysis suggest that one should not deal in this 100 points of range. Characteristic
will be – you expect up, it will go down and you expect down, it will go up.
It is a better idea to wait for the
break of extreme ends of range. If you are taking buy or sell then those might
not have better technical confirmation.
There is another way to read the
current structure. Those call called “bar set up’. On 8th October it
has formed a range of 5752 to 5666. Take a note that we never able to move out
of those ranges after that on decisive basis. Bar set up theory suggest that
until we break on any side we cannot claim for direction.
Now, then which study can give me
direction? Well, there can be answer based on Elliott wave theory. Those are
suggesting that this is the range of consolidation. This consolidation can be 5
waves or 8 waves. We have completed 4 waves till now. We may see the beginning
of 5th wave on down side. It is early to conclude and so I can be
better position to answer those after today’s closing levels.
S&P 500 – I informed that it has
formed a buy with a save of 1424 levels. This buy was applicable for the target
of 1460 which it has already done yesterday. Now it is again in the zone of
resistance near 1475. Failure of 1475 will declare this as yearly top. Today is
25th anniversary of single day biggest drop of Dow Jones.
Another important point to note is
google and Microsoft result. Both were looking equally horrible. Was that the
base of rally? If yes, then market men need to think what they are doing.
We got something on EGoM over
telecom policy yesterday. Those push many questions rather than answer. I can
say it is still unclear. This is just my view as I am not telecom expert. Let us
see how stock will react.
Regards,
Praveen Kumar
