Rally is continued after last week Break Out

Weekly Analysis- 03-01-2011 to 07-01-2011

Wishing you all a very Prosperous, Happy, Healthy & Wealthy New Year 2011

All trends are up, 5th impulsive sub-wave of wave 3 confirmed in last week after completing intermediate term correction in 27 sessions range bound moves.

1-Waves Structure of on going Trend chart:-

(Just click on chart for enlarged view)

Nifty closed at 6135 after forming high at 6147 last Friday. Next resistance ranges are of Indian markets are as follows:-

1- 6180-6195
2- 6250-6320(strong resistance)

5th impulsive sub-wave of wave 3 commenced in last week its Projections and targets are as follows

1- 1st impulsive sub-wave of wave 3 moved up- 5399-3919=1480 points up
2- 2nd corrective sub-wave of wave 3 moved up- 5399-4786=613 points down
3- 3rd impulsive sub-wave of wave 3 moved up- 6339-4786=1553 points up
4- 4th corrective sub-wave of wave 3 moved down- 6339-5690=649 points down
5- 5th impulsive sub-wave of wave 3 if on from 5690 with following projections:-

A- As per Elliot Wave theory "Wave 3 should not be shorter than both Wave 1 and Wave 5" therefore Wave 5 will move up less than 1553 point. Wave 5 started from 5690 and its:-

Wave 5 maximum lenth will be:- 5690+1553= 7243

B- 4th corrective sub-wave was 649 points down and will be better to draw Fibonacci levels acccording to that:-

1- 123.6%- 6492
2- 138.2%- 6586
3- 150.0%- 6663
4- 161.8%- 6740 
5- 176.4%- 6834
6- 200.0%- 6988
7- 223.6%- 7141

As per theory Nifty will positively retrace before testing 7243 and then ABC correction of Wave-3 will be seen according to Fibonacci levels from the top to origin point of Wave-3(3919)

Conclusion

Uptrend got confirmation last week and will be seen now to test above mentioned levels. Complete distribution patterns require for begining of any down trend and until that will not happen minimum on EOD charts till then and any down move will not be considered. Intraday and very short term correction of previous fast up moves always happens to cool down sentiments and that will be seen regularly.

Bullish formations,Trnd lines and Break out:-

(Just click on chart for enlarged view)

Last 2 sessions intraday charts are showing distribution signals therefore a minor/very short term correction is possible in the begining of week and fresh rally will be seen after mentioned correction completion in the coming week.

Finally rally will remain continued and weekly closing will be in Green.