Technical Analysis,Research & Weekly Outlook
(Jan 14 to Jan 18,2013)
Waves Structure of Sub Wave-5 of Wave-3
Nifty-EOD Chart (11-Jan-2013):- |
| Just click on chart for its enlarged view |
1- 5548.35 on 20-11-2012(Sub Wave-4 completion and Sub Wave-5 coontinuation)
2- 5865.45 on 11-12-2012 (Sub Wave-1 of Wave-5 completion and Sub Wave-2 continuation)
3- 5823.15 on 18-12-2012 (Sub Wave-2 of Wave-5 completion and Sub Wave-3 continuation)
4- 6042.15 on 07-01-2013 (Top of Sub Wave-3 of Wave-5)
5- Closing below Sub Wave-1 top(5865.45) on 11-01-2013
Conclusions from EOD chart analysis
As Sub Wave-3 continuation in previous week therefore its minimum target(as per Elliot Wave theory) of 6239.95 with calculation was updated on 08-01-2013 as well as condition of closing above 5965 was also posted on 07-01-2013. As intraday Bullish patterns formations on 10-01-2013 therefore expectation of rally continuation was told on 10-01-2013 and it was seen also on 11-01-2013 but sentiment turned depressed due to escalation of Indo-Pak cross border firing therefore Indian markets could not sustain at higher levels and closed below 5965 on 11-01-2013.
As closing below 5965 on 11-01-2013 therefore as per Elliot Wave theory strong indication of failure of Sub Wave-3 of Wave-5 and emergence of correction possibility as well. Now Sub Wave-5 of Wave-3 is on and when its formation was got confirmation then following topic was posted on 08-12-2012:-
Rally after Short Term Correction
Just click above topic link for detaied analysis and those important features which should be immediately considered are also being reproduced with EOD chart of that day:-
Nifty-EOD Chart (07-Dec-2012):-
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| Just click on chart for its enlarged view |
1- Wave-2 completion(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 Wave-3 is on.
Conclusions from EOD chart analysis
Sub Wave-5 of Wave-3 is on after Sub Wave-4 correction completion with Bullish Flag formation therefore strong up moves will be seen. 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.
As on going Sub Wave-5 made a top of 6042.15 on 07-01-2013 and it is above 6031(calculation given above) therefore Sub Wave-5 at 6042.15 can not be ruled out.
Indicators showing Negative Divergence
Nifty-Daily Indicators Analysis Chart(11-Jan-2013):-
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| Just click on chart for its enlarged view |
Sub Wave-5 is moving up while 4 indicators are moving down therefore Negative Divergence is clearly visible in EOD charts and strong possibility of whole Sub Wave-5 correction.
Conclusions (After Putting All Studies Together)
Following possibilities were updated in previous sessions:-
1- Sub Wave-5 minimum and maximum targets between 6031-6331 was given on 08-12-2012.
2- Minimum target(as per Elliot Wave theory) of 6239.95 with calculation was updated on 08-01-2013 as well as condition of closing above 5965 was also posted on 07-01-2013.
As closing of Sub Wave-3 of Sub Wave-5 below 5965 on 11-01-2013 therefore strong indication of its failure without achieving next target(6239.95) but closing below 5965 was due to most sensitive negative news of tension mounting on LOC therefore sustaining below 5965 should also be firstly watched. If Nifty sustains above 5965 then whole Sub Wave-5 correction will start from any levels between 6239.95-6331 and finally sustaining below 5965 will mean Sub Wave-5 completion at 6042.15 on 07-01-2013.
Sustaining below 5965 in the coming week will mean possibility of whole Sub Wave-5 correction which started from 4770.35 on 04-06-2012 and completed at 6042.15 on 07-01-2013 after gaining 1271.80 points. As correction beginning possibility after Sub Wave-5 achieving its targets at 6042.15(between 6031-6331) therefore deeper correction can not be ruled out. Let correction beginning confirmation come then size of correction,next Levels and crucial supports will be updated.
As on going impulsive View Sub Wave-5 has achieved its 1st target and negative news of Indo-Pak Cross Border Firing also and sentiment has turned dampened as well as view is cautious therefore sustaining beyond 5965 should be firstly watched for the confirmation of last Friday started correction continuation or correction beginning possibility between 6239.95-6331.