Most encouraging with expectation of 6500 begun week ended in most depressing mood with possibility of 5500 in most of the participants' mind.
Most reacted whole week moves in above manner but I told following lines:-
1- In weekly on 03-01-2011- "Last 2 sessions intraday charts are showing distribution signals therefore a minor/very short term correction is possible in the begining of week"
2- Pre-Open(04-01-2011)-
a-"Nifty will not sustain above 6178."
b-"yesterday intraday charts genuine selling patterns therefore slipping below 6154 will be seen"
3-Pre-Open(05-01-2011)- "As good selling at higher levels therefore slipping below 6128 possibility is high to test minimum 6080"
It is also true that I was expecting termination of correction and begining of fresh rally in the last of week but when I found that correction will remain continued therefore I told before 12 noon in Mid-session on 07-01-2011:-
"If Nifty sustains below 5988 then it will be down move confirmations therefore sustaining below 5988 will be watched for deciding next trend."
As per my view deep correction in last 2 sessions is the result of 'strongly bullish and buy on dips psychology' of general traders and to press them for panic selling as well as to covert most bullish sentiments into most bearish sentiments therefore Water fall patterns in last 2 sessions is showing consolidation:-
1- Water Fall Patterns in last 2 sessions intraday charts:-
(Just click on chart for its enlarged view)
There was no break,Nifty closed at 5996 and on the base of intraday consolidation patterns on 28-12-2010 I told following lines for that rally above 6000 which was seen immediately after my following posting in Pre-Open Outlook on 29-12-2010:-
"As per my view Indian markets are well prepared for upmoves and sustaining above 6040 will be confirmation of next rally. Expected that rally will begin today and nifty will cross as well as sustain above 6040 now"
2- Last 10 sessions intraday charts showing rally after 28-12-2010,4 sessions distribution pattern and last 2 sessions seeep fall:-
Steep fall seen in last 2 sessions in which all the immediate supports and Weekly Pivot Supports(except support-3)also broken and for this I am presenting my following views:-
1- Panic bottom formation last Friday therefore it may be termination of last week down trend also.
2- As steep fall pattern is Water Fall and within it Falling Wedge pattern is also seen therefore reversal of last week down move is possible after these consolidation and reversal patterns.
3- Although I told for rally without any break on 29-12-2010 but not telling for down move after breaking down of so many levels and adding my following views:-
A- Upmove expected after above mentioned consolidation patterns.
B- Technically sustaining below is must for 3 sessions.
C- If Nifty sustainins below 6015 in next 2 sessions then fusing of rally will get confirmation otherwise Whipsaw(wrong signal) will be understood.
D- Next support is at 5865 and slipping below will be down move confirmation but I am not expecting its happening and my view is bullish due to following trading patterns.
3- Conclusions from EOD Chart:-
1 Wave 3 is on
2- Long term is up and Short term trend is down. Although Nifty moved below intermediate term levels but no confirmations yet.
3- No distribution pattern at present is last 4 months range bound moves
4- Pennant formation in last 2 months EOD chart. It is continuation of trend pattern. As on going trend is uptrend therefore Pennant is signalling continuation of uptrend.
5- All the rising trend lines are not breached therefore up trend is safe at present.
3-Bullish Formations in EOD Chart
Conclusions from Weekly Chart:-
1- Pennant formation in last 9 weeks chart and it is confirming continuation of uptrend in weekly chart also.
2- All the rising trend lines are not breached in weekly charts also therefore up trend is safe at present.
4- Bullish Formations in Weekly Chart
(Just click on chart for its enlarged view)
Conclusions
No distribution pattern in weekly and daily chart and on the other hand above mentioned uptrend formations also. If selling at higher levels then last 2 sessions consolidation patterns also in steep fall. Panic is much due to rise in inflation last Thursday but Onion will not decide Indian economy and things will be ettle down in coming weeks. No reason for down move confimations and technically sustaining below 6015 is must in next 2 days for down move confirmation as well as Nifty slipping below 5865 will also be down move confirmation. Until it will not happen till then any down move will not be considered.
Short term correction had been due in the begining of week which finished in the last of week. 120 points panic down in last 3 hours last Friday and as per my view correction completed in this fall. As per my view Firstly bounce back and after that V-shaped recovery is possible in the coming sessions and fresh rally will be seen in the coming weeks. Positive weely closing expected in this week.