Long Term Trend is at Stake & Bearish Patterns signalling Deeper Correction
Technical Analysis,Research & Weekly Outlook
(May 04 to May 08,2015)
Nifty-EOD Chart (30-Apr-2015):-
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Technical Patterns and Formations in EOD charts
1- 5118.85 on 28-08-2013(Wave-1 beginning after 'ABC' correction completion)
2- Wave-1(6415.25 on 09-12-2013)
3- Wave-2(5933.30 on 04-02-2014)
4- Wave-3(8626.95 on 04-12-2014)
5- Wave-4(7961.35 on 17-12-2014)
6- Wave-5(9119.20 on 04-03-2015)('ABC' correction beginning)
7- Wave-A(8269.15 on 27-03-2015)
8- Wave-B(8844.40 on 15-04-2015)
9- Wave-C correction continuation with recent bottom formation at 8144.75 on 30-04-2015
Conclusions from EOD chart analysis
Wave-1 started from 5118.85 on 28-08-2013 which completed after 18 months 4000 points rally at 9119.20 on 04-03-2015 and 'ABC' correction begun which is in progress. As correction started after the completion of Wave-5 therefore it may correct whole that rally which started from 5118.85 on 28-08-2013. Retracement / correction levels of this rally are as follows:-
13.0%- 8598(corrected)
23.6%- 8174(corrected)
27,0%- 8038
38.2%- 7590(Crucial level)
50.0%- 7118(Crucial level)
61.8%- 6646(Crucial level)
70.7%- 6290
76.4%- 6062
78.6%- 5974
88.6%- 5574
Waves structure of on going Wave-5
Nifty-EOD Chart (30-Apr-2015):-
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| Just click on chart for its enlarged view |
Technical Patterns and Formations in EOD charts
1- 7961.35 on 17-12-2014(Wave-5 beginning after Wave-4 completion)
2- Sub Wave-1(8445.60 on 05-01-2015)
3- Sub Wave-2(8065.45 on 07-01-2015)
4- Sub Wave-3(8996.60 on 30-01-2015)
5- Sub Wave-4(8470.50 on 10-02-2015)
6- Sub Wave-5 of Wave-5 completion at 9119.20 on 04-03-2015 and 'ABC'correction beginning
7- Wave-'A'(8269.15 on 27-03-2015)
8- Wave-'B'(8844.40 on 15-04-2015)
9- Wave-C correction continuation with recent bottom formation at 8144.75 on 30-04-2015
Conclusions from EOD chart analysis
Last 2 Retracement/correction levels of Wave-5 are as follows:-
1- 78.6%- 8208(corrected)
2- 88.6%- 8093(Last Retracement / correction level)
Wave-5 started from 7961.35 on 17-12-2014 which completed at 9119.20 and its has crossed 78.6%(8208) levels. Now its last retracement levels is at 88.6%(8093) and once its valid breaking down will mean high possibility of fresh deeper correction after full retracement of Wave-5 at 7961.35.
Lower rising line of "9 Months Broadening Rising Channel" broken down
Nifty-EOD Chart (30-Apr-2015):-
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Technical Patterns and Formations in EOD charts
1- 9 Months rally in Broadening Rising Channel
2- Lower rising line of Broadening Rising Channel broken down
3- Last 5 Sessions closing below the lower rising line of Channel
Conclusions from EOD chart analysis
As such huge 9 Months Broadening Rising Channel broken down and last 5 Sessions closing also below the lower rising line of Channel therefore emergence of strong possibility of much deeper correction because Broadening Rising Channel is a Bearish pattern. Now correction like 2011 will be considered and possibility of correction like 2008 also can not be ruled out.
Bearish Head and Shoulders Pattern Neckline at 8269 broken down
Nifty-EOD Chart (30-Apr-2015):-
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Technical Patterns and Formations in EOD charts
1- Bearish Head and Shoulders Pattern formations in 67 sessions with Neckline at 8269
2- Neckline of Head and Shoulders broken down
3- Last 2 Sessions closing below Neckline
Conclusions from EOD chart analysis
67 Sessions like big Head and Shoulders Bearish Pattern formations and its Neckline(8269) broken doen as well as last 2 sessions closing below it therefore this pattern is also showing fresh deeper correction indications. As 3 sessions closing below its Neckline is must for its breaking down confirmation therefore should be firstly watched on Next trading day. Once Neckline(8269) broken down confirmation will mean beginning fresh deeper down moves.
Waves structure of 'ABC'correction
Nifty-EOD Chart (30-Apr-2015):-
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| Just click on chart for its enlarged view |
Technical Patterns and Formations in EOD charts
1- Sub Wave-5 of Wave-5 completion at 9119.20 on 04-03-2015 and 'ABC'correction beginning
2- Wave-'A'(8269.15 on 27-03-2015)
3- Wave-'A' corrected 850 points
4- Wave-'B'(8844.40 on 15-04-2015)
5- Wave-'C' has corrected 700 points yet.
6- Wave-C correction continuation with recent bottom formation at 8144.75 on 30-04-2015
Conclusions from EOD chart analysis
Wave-'A' corrected 850 points(9119-8269)
Now Wave-'C' correction is on after Wave-'B'completion at 8844 and if Wave-'C' corrects 100% of Wave-'A' then:-
Wave-'C' may correct up to 7994(8844-850)
Wave-'C' is on and no confirmation of its completion yet therefore correction continuation towards 7994 will be considered.
Conclusions (After Putting All Studies Together)
Short and Intermediate Term Trends are down and Long Term Trend is at stake because previous closing(8181.50) was seen just below its decider 200 Day EMA(today at 8186). As correction started after Wave-5 completion at 9119.20 on 04-03-2015 therefore on going correction may correct whole that 4000 points rally which started from 5118.85 on 28-08-2013.
Above mentioned 2 huge Bearish patterns formations in last 9 months and almost breaking down confirmations of these both patterns therefore emergence of much deeper correction possibility. Now Wave-'C' is on and no confirmation of its completion yet therefore correction continuation towards 100% of Wave-'A'(7994) will be considered now and that will be:-
1- Long Term Trend trend turning down confirmation after breaking down of its decider 200 Day EMA(today at 8186).
2- 100% breaking down confirmation mentioned 2 huge Bearish patterns.
Correction is on and its continuation is expected as well as much deeper correction will get confirmation after slipping below 7994
