Short Term Correction Possibility
Technical Analysis,Research & Weekly Outlook
Technical Analysis,Research & Weekly Outlook
(Apr 29 to May 03,2013)
Nifty-EOD Chart (26-Apr-2013):- |
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1- Impulsive Wave 3 completion at 6111.80 on 29-01-2013
2- Corrective Wave 4 continuation
3- Wave A(5663.60 on 04-03-2012)
4- Wave B(5971.20 on 11-03-2012)
5- Corrective Wave C of Wave 4 completion(5477.20 on 10-04-2013)
6- Impulsive Wave 5 continuation and its top formation at 5924.60 on 25-04-2013.
3- Bearish Harami Candle formation on 26-04-2013 near the top of on going Wave-5
Conclusions from EOD chart analysis
Impulsive Wave 1 begun at 4531.15 on 20-12-2011 after 13 Months correction completion and Wave 3 was completed at 6111.80 on 29-01-2013. Detailed analysis of Wave 1 to Wave 3 has already been updated in following topic on 21-04-2013:-
Impulsive Wave 5 is on after Wave 4 correction completion at 5477.20 on 10-04-2013 and its top formation at 5924.60 on 25-04-2013. Technically Wave-5 should form new top above the highest of Wave-3(6111.80). As per Elliot Wave Theory:-
Wave-3 should never be shorter than both Wave-1 and Wave-5
Wave-3 gained 1341.55 Points 6111.80(Wave-3 top)-4770.25(Wave-3 bottom)
Wave-5 should not gain more than 1341.55 Points which started from 5477.20 therefore its highest level will be less than 6818.75(5477.20+1341.55)
Fibonacci Levels above Wave-3 top(6111.80) are as follows:-
113.0%- 6193
123.6%- 6260
127.0%- 6282
138.2%- 6353
150.0%- 5428
161.8%- 6502
As 161.8% is crucial therefore firstly its possibility will be considered. Technically Wave-5 failure or its completions after double top formations possibility should be kept in mind because it also happens sometimes.
It is confirm that market require complete selling patterns minimum on Daily charts for reevrsal of Wave-5 and until that will not happen till then its continuation will be seen.
Nifty-Intra Day Chart (Apr 25 & Apr 26,2013):-
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1- Higher levels selling and lower levels buying patterns formations.
2- High volatility in last hours on 25-04-2013.
3- Bullish falling Channel formations on 26-04-2013.
4- 2 Sessions actual trading between 5862-5922
Conclusions from 2 Sessions intra day chart analysis
Range bound 2 sessions with both buying and selling patterns formations therefore mixed formations with good selling at higher levels and complete consolidations are required for next up moves above 5862.
Conclusions (After Putting All Studies Together)
All trends are up but Short term Indicators are overbought after 447 points rally in 10 sessions. As Bearish Harami Candle formation on 26-04-2013 near the top of on going rally with higher levels selling also in last 2 sessions between 5862-5922 therefore correction will also be considered and confirmations will be after valid breaking down of previous 2 sessions lowest(5862).
As Political temperature will be high in next week because of CBI chief affidavit in Apex court disclosing P.M.interference therefore volatility will be high. Technically Short Term Correction is due and if political situations worsen then deeper correction will be seen. R.B.I. Credit Policy will be announced on 3rd May and high possibility of rates reduction as well as CRR cut.
Technically up moves are expected after correction completion if no immediate risk to Manmohan Singh Government.