Friday, July 27, 2012

Nifty - Elliott Wave Analysis

4 Hourly
Nifty corrected sharply in last half hour of trading yesterday. I have still not bothered to find out what was the publicized reason for that fall. Since I don't follow news or any other financial media for that matter, I am usually happily oblivious to such events. But that surely does not mean that I am not prepared. Look at yesterday's post, especially at the Nifty chart. I had already marked a probable support zone, which might provide support to this recent fall in prices. Prices have gapped up sharply, as if yesterday's "event" means nothing, if at all there was an event, I gladly will never know. Prices have rejected the price range we had marked yesterday, now what we need to make any profitable trades, is prices to sustain above that zone, and start moving up in the earnest. The hourly chart shows positive divergences on both STS and MACD, The 4 hourly chart is showing positive divergence on STS, also RSI has turned sharply from extremely oversold region, The daily chart shows MACD Signal line poised to form a Zero Line Reversal (ZLR), and a small positive divergence on STS.
Now Nifty needs to close above certain critical levels, to confirm this reversal. The first and foremost is 5 DEMA at 5112.50, second is 5 WLEMA at 5145, and third is 5 DHEMA at 5155. Once Nifty manages to close above these levels, we may see prices going to higher levels from here.
Watch out for out currency update on USDINR to get further clues about the market.

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