Friday, January 13, 2012

Nifty invalidated our 'bearish pattern', but not our 'bearish view' YET!

Nifty invalidated our 'Leading Diagonal Pattern' today, but that does not mean our bearish view on market is invalidated too. Our bearish view is still valid and let us see what possibilities markets have in store for us.
1. We may have completed a 5 wave move in wave {c} of  (4). If this scenario plays out we will fall hard tomorrow and at least effect some retracement of this 5 wave up move in wave {c} of (4). And if we take out 4780 levels on the down side then we are in for much bigger falls. Right now 4780 is critical and we have to watch the prices around this level.. 
2. We may not have completed the wave 4 of {c} yet and may be forming an 'irregular flat' pattern. If this pattern is forming then we will see prices coming back to the area of 4800 - 4780 levels tomorrow in wave [ci] of 4 of {c}. And will move back up to complete the wave 5 of {c}, if we get support for prices in this range. This is our alternate count, but is possible.

But there are factors which support the first view of 'bigger falls', as MACD has made a divergence as well as a bearish hook on hourly chart. Also RSI is showing negative divergence. So this will cause some pressure on the prices. Now we have to watch the prices tomorrow with these two possibilities, and if Nifty takes out 4915 - 35 range on the upside tomorrow with confidence then we might conclude that this bearish view of mine needs to be reevaluated.


  1. Hi Aniruddha,

    Can u pls post the Higher Degree wave count from 6339 ??

    Are u considering the following DZZ count:-
    IM DEGREE W: 6339-5177-5944-4728
    IM DEGREE X: 4728-5400
    IM DEGREE Y: 5400-DOWN** in play as a ZZ ??

    Best wishes

    1. I am bad at numbers, so posting charts of weekly and daily counts instead.

      Weekly Count -

      Daily count -

    2. good chart Aniruddha. The bearish count is very much valid. Slight aberration is there due to the INR fluctuations. However, a rise up to 4987 cannot be ruled out now and the higher the rise, the deeper the fall.

      thanks and regards


    3. Yes there is a possibility of a rise but I feel we should complete a flat correction in wave 4 for that before, otherwise the top boundary of the wedge may provide stiff resistance. If we bide time by forming the flat in wave 4, then we can get more potential upside space for prices. :)

  2. hi aniruddha, what a complex move in nifty, still no clue for weakness......

    1. Nifty is strong, and there are a couple of possibility for this move in Nifty. Will post them EOD. I suggest don't be in a hurry to short Nifty yet! Please refer the Weekly and Daily count pages on the blog to get a better idea!


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