Weekly Analysis- 21-02-2011 to 25-02-2011
Following conclusive lines was told in Weekly Analysis- 14-02-2011 to 18-02-2011 and that proved 100% true:-
"Pull Back rally/Relief rally/Bounce back is very much due and that will be seen in the coming week"
Following events will be closely watched by Indian markets and its results will decide Indian stock markets next immediate moves:-
21 Feb - Budget Session of Parliament begins
21/22 feb- Govt decision on JPC
24 Feb - Feb derivative expiry
25 Feb - Railway Budget-2011-2012
28 Feb - General Budget-2011-2012
Wave-5 started on 11-02-2011 from 5177 and its first 6 sessions moves are as follows:-
1- Firstly 422 points rally completed in first 6 sessions.
2- As very short term indicators were overbought therefore
3- 38,2% correction(almost) of last 5 sessions rally seen in last 6 session(last Friday).
Initial 5 sessions rally has been corrected upto 38,2% level last Friday and confirmation required that correction has been completed or not. Next immediete retracement levels are as follows and it has to be decided that correction has been completed at 5442 last Friday or may correct upto following levels:-
38.2%- 5437
50.0%- 5388
61.8%- 5338
2 following bullish formations developed in last 5 sessions:-
1- Falling Channel break out
2- Inverse Head and Shoulders Formation and Neck Line is at 5558
1-Falling Channel Chart:-
(Just click on chart for its enlarged view)
2-Inverse Head and Shoulders Formation:-
(Just click on chart for its enlarged view)
If Nifty does not dip below upper line of Falling Channel and cross Neck Line(5558) of Inverse Head and Shoulders then that will be strong rally expectation point and first confirmation level will be sustaining above 200-Day EMA(today at 5617). Next resistances are as follows:-
1- 5640-5780(Strong resistance)
2- 5800-5860(Strong rally above 5860)
3- 6150-6180
4- 6240-6320
Market will face strong resistance between 5640-5860 and crossing 5860 will mean worst is over and fast strong rally eruption.
Conclusions
Short term trend is up,long term trend is down. Intermediate term trend is sideways and struggling for direction. Decisive confirmation of intermediate term trend will show clear trend to Indian markets because intermediate term trend will be up at 5556 and Inverse Head and Shoulders Neck Line is at 5558. Nifty sustaining above 5558 will mean strong up move because:-
1- Intermediate trend will be up
2- Trend reversal Inverse Head and Shoulders pattern will get confirmation from its neck line break out.
Bottoming out confirmation point of last Friday started correction is required first and sustaining beyond last 4 sessions most time trading range(5460-5500) will give next immediate moves confirmations.
3-First trend deciding Range Chart:-
(Just click on chart for its enlarged view)
As per my view Nifty will trade first within last Friday range and will consolidate as well as prepare for post Budget up moves. Sustaining above following levels will be watched one by one for next up moves confirmations:-
1- 5500
2- 5556/5558
3- 200-Day EMA(today at 5617)
4- 5780
5- 5860
5558 should be watched for first strong upmove confirmation point. As per my view Nifty will sustain above 5558 after some more consolidations in next couple of sessions and then rally will be seen.
Coming 6 sessions are full of events and will be highly volatile also therefore intraday charts formations and their micro analysis will only be able to give first confirmation of Post Budget Indian stock markets. Cautious trading positions must be taken after minute analysis this week intraday charts.
