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Analysis for Short Term Traders and Long Term Investors
Technical Analysis,Research & Weekly Outlook
(Jan 28 to Feb 01,2013)
Nifty-EOD Chart (25-Jan-2013):- |
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1- 6357.10 on 08-01-2008(All time high)
2- 2252.75 on 27-10-2008(Correction completion)
3- Wave-1(6338.50 on 05-11-2010)
4- Wave-2(4531.15 on 20-12-2011(Rally beginning after 13 Months correction completion)
5- Wave-3 is continuation from 20-12-2011
6- Sub Wave-1 of Wave-3(5629.95 on 22-02-2012)
7- Sub Wave-2 of Wave-3(4770.35 on 04-06-2012)
8- Sub Wave-3 of Wave-3 continuation &its top formation at 6101.30
Conclusions from EOD chart analysis
Sub Wave-3 0f Wave-3 is on from 4531.15 and its waves structure with technical formations have to be firstly understood because market will react accordingly in the coming week.
Waves Structure of Sub Wave-3 of Wave-3
Nifty-EOD Chart (25-Jan-2013):-
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1- Sub Wave-3 continuation(4770.35 on 04-06-2012)
2- Sub Wave-1 gained 578.20 points(5348.55 on 10-07-2012)
3- Sub Wave-2(5032.40 on 26-07-2012)
4- Sub Wave-3 gained 782.95 points(5815.35 on 05-10-2012)
5- Sub Wave-4(5548.35 on 20-11-2012)
6- Sub Wave-5 of Sub Wave-3 continuation,its recent top is at 6101.30
Conclusions from EOD chart analysis
Sub Wave-5 of Wave-3 is on after Sub Wave-4 correction completion. As per Elliot Wave theory Wave-3 should never be shorter than both Wave-1 and Sub Wave-5. Wave-3 gained 782.95 points as per theory Sub Wave-5 will gain less than 782.95 point from the bottom of Wave-4(5548.35) therefore Sub Wave-5 maximum target will be less than 6331.30(5548.35+782.95). Previous tops above 6000 are as follows:-
1- 6357.10 on 08-01-2008.
2- 6338.50 on 05-11-2010.
As on going Sub Wave-5 rally possible maximum target is near 6331 therefore Triple Top formation may be seen. Expected that Sub Wave-5 will not gain less than 61.8% of Sub Wave-3 gains and Sub Wave-5 targets should be between 6031-6331.
Sub Wave-3 of Wave-3 continuation after Sub Wave-4 correction completion at 5548.35 and its Waves structure is al follows:-
Waves Structure of Sub Wave-3 of Sub Wave-5
Nifty-EOD Chart (25-Jan-2013):-
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1- Sub Wave-5 coontinuation(5548.35 on 20-11-2012)
2- Sub Wave-1 of Wave-5 gained 416.80 points(5965.15 on 11-12-2012)
3- Sub Wave-2 of Wave-5(5823.15 on 18-12-2012)
4- Sub Wave-3 of Wave-5 is continued with Bearish Rising Channel formation and 5 Waves of Bearish Rising Wedge formation within it.
5- Sub Wave-3 of Wave-5 is on(Top formation at 6101.30 on 22-01-2013 and gained 278.15 points yet) but with
Conclusions from EOD chart analysis
Sub Wave-3 of Wave-5 is on and as per Elliot Wave theory Wave-3 should never be shorter than both Wave-1 and Sub Wave-5. Wave-1 gained 416.80 points as per theory Sub Wave-3 minimum target is:-
5823.15(Sub Wave-3 started)+416.80(Sub Wave-1 gained)=6239.95 is minimum target of ongoing Sub Wave-3 of Wave-5 but its continuation with Bearish Rising Channel formation and 5 Waves of Bearish Rising Wedge formation within it.
Daily Indicators and Averages Analysis
Nifty-Daily Indicators and Averages Analysis Chart(25-Jan-2013):-
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1- 20 Day EMA is at- 6606
2- 55 Day EMA is at- 5890
3- 200 Day EMA is at- 5577
Nifty is trading well above 55 and 200 Day EMA therefore Long and Intermediate term trends are up and Short Term Trend is sideways between 6000-6100 for the last 9 sessions. As Nifty is trading near the upper Band of Bollinger Band for the last 18 sessions therefore indicating down moves possibility to test Lower bend.
Sub Wave-5 is moving up while 4 indicators are moving down therefore Negative Divergence is clearly visible in EOD charts. It is strong indication of loosing strength and deeper correction possibility. As negative divergence in whole Sub Wave-5 therefore possibility of its complete retracement after beginning of correction.
Nifty-Intra Day Chart (Jan 15 to Jan 25,2013):-
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1- Support between 6000-6020.
2- Support between 6020-6033
3- Resistance between 6068-6100
4- 9 Sessions actual trading between 6000-6100
Conclusions from 9 Sessions intra day chart analysis
9 Sessions sideways market between 6000-6100 with good supports at lower levels and equally good resistances at higher levels as well as volatility also seen.
As technical positions are not one sided at this moment therefore firstly trading will be seen within this range valid break out of this range will decide next immediate trend.
Nifty-Intra Day Chart (25-Jan-2013):-
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1- Consolidation between 6014-6033
2- Up moves in Rising Channel with Bearish Rising Wedge formation within it.
3- Whole day actual trading between 6014-6080
Conclusions from intra day chart analysis
Although whole day good up moves after lower levels consolidations but between Rising Channel with Bearish Rising Wedge formation within it therefore no immediate rally confirmation despite closing near higher levels of the day and follow up selling in the beginning of next week will mean fast retracement of whole intraday up move of 25-01-2013.
Conclusions (After Putting All Studies Together)
Intermediate to Long Term Outlook for Investors
Wave-2 completed at 4531.15 on 20-12-2011 after 13 Months low formation and correction completion as well as since then Wave-3 continuation and recent top formation exactly after 13 months at 6101.30 on 22-01-2013. As 13 is a Fibonacci Number and financial markets are tend to reverse and form new trend at or near about Fibonacci Numbers therefore possibility of rally top formation within on going 13th month(upto 20-02-2013) should be kept in mind.
Sub Wave-5 targets should be between 6031-6331 and ongoing Sub Wave-3 of Wave-5 minimum target is at 6239.95 but its continuation is with Bearish Rising Channel formation and 5 Waves of Bearish Rising Wedge formation within it also therefore possibility of market prepataion for correction. Indicators on daily charts are showing negative divergence which means that market is loosing strength. As upmoves are without force and lacking momentum therefore telling for rally reaching near targets and correction beginning possibility. Minimum target of onging Sub Wave-3 of Sub Wave-5 is at 6239.95 and Sub Wave-5 maximum target is at 6331 and 2 more waves(Sub Wave-4 of Sub Wave-5 and Sub Wave-5 of Sub Wave-5) formations is left therefore following possibilities should be kept in mond:-
1- On going Sub Wave-3 of Sub Wave-5 completion between 6239.95-6331.
2- Sub Wave-4 of Sub Wave-5 correction
3- Sub Wave-5 of Sub Wave-5 continuation toward maximum 6331.
As correction will start from any level between 6239.95-6331 and Sub Wave-5 maximum target is at 6331 therefore double top formation and high possibility of that Sub Wave-3 correction which started from 4770.35 on 04-06-2012. Let correction beginning confirmation come then its levels will be updated.
On going Wave-3 started from 4531.15 and according to Elliot Wave theory its minimum target is at 8616.90 and next rally will restart after above mentioned expected correction completion above 5629.95. Just click following topic link and understand its calculation:-
Short Term Outlook for Traders
Market will react on RBI Credit policy on 29-01-2013 and prepare for next Deravative month upto 31-01-2013. As Union Budget in next month therefore Indian markets will prepare for it also in next month. Negative Divergence in Daily charts therefore possibility of correction and market is preparing for correction also because Bearish Rising Channel formation and 5 Waves of Bearish Rising Wedge formation also seen in EOD Charts.
Technically correction will start from any level between 6239.95-6331 but 9 Sessions sideways market between 6000-6100 with good supports at lower levels and equally good resistances at higher levels as well as highly volatile market in previous week which is Bear market indication therefore Indian markets are well prepared for correction and RBI Credit policy will decide for correction beginning from 29 Jan or 1st week of Feb 3013.
Although good up moves last Friday but with Bearish formations also and next resistances are between 6068-6100 therefore Nifty will hover around this range next couple of sessions before RBI Credit policy and prepare for next moves. Sharp moves are expected after RBI Credit policy and valid Break out of 6068-6100 will mean:-
1- Below 6068 will mean immediate deeper correction and market is prepare for it also through negative divergence and Bearish formations in EOD Charts.
2- Above 6100 will mean firstly up moves toward 6239.95-6331 and after that deeper correction from 1st week of Feb 3013.
Let market prepare for post RBI Credit policy moves then We shall update in Mid-session Outlooks next moves possibility after RBI Credit policy according to formations of next Monday intraday charts.