Wednesday, June 26, 2013

Nifty - Elliott Wave Update

  1. Tomorrow is expiry day, and what the markets will do is a million dollar question?
  2. Now trying to anticipate expiry day move is a difficult endeavor, and requires deep understanding of option data, and many other market factors.
  3. Here only EWP is used to anticipate the price action, this is in no way a recommendation to trade, but just an experiment.
  4. The chart above suggests that the price action from last pivot high is of corrective nature, and taking the shape of a DZZ.
  5. The last leg of the second ZZ, is showing clear 5 wave move, with market consolidating in wave 4, possibly a triangle.
  6. Once this triangle is resolved we will most likely get our wave 5 down. The funny part is if this triangle resolves in the upward direction, our view is invalidated.

Monday, June 24, 2013

Nifty - Elliott Wave Update

  1. Nifty is approaching a host of supports ranging from 5600 odd levels to 5475. The last pivot low rests at 5477.20, unless this pivot low is taken out there is a possibility of another leg up.
  2. Whether this leg up takes out the last pivot high around 6229.45 remains to be seen.
  3. The fall from last pivot high is looking more corrective than impulsive, and given the supports combined with possible +ve divergences, we may atleast see a pause to this vicious fall.
  4. Also prices have already taken greater time to fall as compared to the last rally and still have not retraced the rise completely, which means the larger trend should still be up.
  5. But all this analysis is anticipative, a wise trader always follows what market is doing, and right now it is moving down, unless there is a clear evidence that the trend has turned no long positions are warranted. Stop-losses can be tightened at best on shorts.
  6. The support zones mentioned above have provided support to the prices twice before, hope prices get third time lucky. But the overall picture is not encouraging, even though we may get a leg up, but the picture is turning bearish on a bigger fractal. Unless the all time high is taken out we cannot expect the bullish euphoria to return.

Tuesday, June 18, 2013

Nifty - Elliott Wave Update

  1. Here is a slightly modified count for Nifty.
  2. A double three, a flat followed by a ZZ, altered the end of wave (a).
  3. This count keeps the possibility of another up leg alive.
  4. But if we close the gap made during the island reversal and the preferably the low of the island, then this possibility loses its credibility.
  5. Till such time, due respect should be given to what markets are telling us.
  6. Clearly the long side had a great reward to risk ratio, but that is always true in a down trend, this is the only reason people fall prey to bottom fishing.
  7. But a clear chart pattern (island reversal), a plausible wave count, a BO above the TL, and +ve divergence in the indicators, all support the possibility of at least a near term bottom forming.
  8. We have clear validation and invalidation points for this view, till any one side is confirmed.

Monday, June 17, 2013

Nifty - Technical Update

  1. Nifty has tested a strong support at 5750.
  2. Went below it for one day, even closed below it, but bounced back smartly the very next day, as if rejecting that level completely. 
  3. In this process, we have got a typical chart pattern by the name of an "Island Reversal".
  4. Now prices should sustain above this gap, to confirm the pattern, and should see a nice up move from these levels.
  5. We have just broken above a falling TL, and barring the the gap down day (the island), we can safely say that the price action is contained well within a set of parallel lines, indicating that the price action is corrective in nature.
  6. So all this suggests that we are in for another up leg, but this would be possible only if we take out a crucial resistance band of 5970-5870, above which this upmove if it materializes should not find much resistance.

USDINR - Technical Update

  1. USDINR reached both HnS targets. (This pattern is really potent when it plays out.)
  2. And as with any rapid rise a pause is always good.
  3. We get a better idea by looking at the weekly chart below.
  1. There is a rising wedge type pattern forming on the charts.
  2. We have actually reached the upper channel boundary of the pattern too, so again prices may pause a while.
  3. Now technically we have reached the targets but there is a possibility of another leg up once this consolidation is done with.
  4. Also a possibility of a parabolic rise is there if prices take out the upper channel boundary of this rising wedge pattern.
Right now a pause is in order, which might give equity markets some respite. We have to keep a close eye on the pattern which may form during this consolidation, to get further insights in the markets.

Tuesday, June 04, 2013

Tata Motors - Technical Update

  1. TML is forming a rising wedge.
  2. We can spot a HnS too, marked on the chart.
  3. We have broken out from the NL, and we are consolidating above it, this is a bullish sign.
  4. We have first target zone 338-345, but we need the broad markets to support it.

Nifty - Elliott Wave Update

  1. Nifty did correct from the resistance zone of 6140-6070, and fell down towards the previous support zone of 5970-5935.
  2. This support zone has held prices for last 2 days, also a 3 wave move is visible on the charts.
  3. Now if this support zone is respected, we might have seen the completion of wave {a} or even wave (b). in either case we may see prices rising from this support zone, and head towards the top of wave (a), at least.
  4. If prices break below this support zone convincingly, we may see further down move towards 5750 levels.