NIFTY weekly analysis for 15 December’14 to 19 December’14
Elliott wave theory: It was giving all hints for a short
term top just above 8620 levels. I was expecting a confirmation point of
correction below 8500 levels. We got that desired correction. It has not done
yet. It’s just corrective wave ‘a’. We will see a recovery wave ‘b’ and then a
newer wave ‘c’ on downside. So far, if the magnitude of wave ‘a’ is more than
400 points then magnitude of wave ‘c’ will be also be more than 400 points. Key
support for Nifty is at 8175 and then at 8135. Sooner or later, after a bounce,
this will become 10% correction.
Market cycle: December is usually a good month for
equity but now it has broken the trend and crude has changed the outlook of
whole world. There is a strong fear of another global slowdown. Market wants a
new valuation of stocks and commodity price after stimulus. It’s a bad news
because I strongly believe that this market is highly overvalued. My sense is
that crude oil can get a support at $55/bbl or nearby. If not then it can
spread catastrophic effect on whole world.
Technical indicators: RSI has given warning for few weeks
and we saw an impact last week. It shows that it was just a beginning. This prime
indicator is still weak.
Charting pattern: Previous reversal point was 8180,
which has caused for correction towards 7723. So, same point of 8180 may offer
some technical support. If not, then look for Elliott wave support point of
8135 and 8070.
Join the conversation