Pull Back rally Expectations but Trend Reversal after Sustaining above Most crucial Levels
Technical Analysis,Research & Weekly Outlook
(Feb 15 to Feb 19,2016)
7 Years Waves structure after 2008 big correction
Nifty-EOD Chart (12-Feb-2016):-
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1- 2252.75 on 27-10-2008(Impulsive Wave-1 beginning after 2008 big correction completion)
2- Corrective Wave 2 beginning after Wave 1 completion at 6338.50 on 05-11-2010
3- Impulsive Wave-3 beginning after 13 Months Wave-2 correction completion at 4531.15 on 20-12-2011
4- Corrective Wave 4 beginning after many times new life time high formations and Wave 3 completion at 9119.20 on 04-03-2015
5- Corrective Wave 4 continuation with recent bottom formation at 6869.00 on 12-02-2016
Fibonacci Retracement levels of Wave-3
Nifty-EOD Chart (12-Feb-2016):-
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Waves Structure of on going Correction
Nifty-EOD Chart (05-Feb-2016):-
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1- Wave-5 completion at 9119.20 on 04-03-2015 and Wave-A of 'ABC' correction beginning after life time high formation)
2- Wave-1 of Wave-A(8269.15 on 27-03-2015)
3- Wave-2 of Wave-A(8844.40 on 15-04-2015)
4- Wave-3 of Wave-A(7997.15 on 07-05-2015)
5- Wave-4 of Wave-A(8489.55 on 22-05-2015)
6- Wave-5 of corrective Wave-A completion(7940.30 on 12-06-2015) and Wave-B beginning
7- Wave-B completion and corrective Wave-C beginning(8654.75 on 23-07-2015)
8- Wave-1 of Wave-C(7539.50 on 08-09-2015)
9- Wave-2 of Wave-C(8336.30 on 26-10-2015)
10- Wave-3 of Wave-C continuation with recent botttom formation at 6869.00 on 12-02-2016
Intra Day Chart Analysis(15-02-2016)
Nifty-Intra Day Chart (12-Feb-2016):-
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1- Down moves in Bullish Falling Channels
2- Up moves with intraday corrections
3- Whole day actual trading between 6869-7034
Conclusions (After Putting All Studies Together)
Correction continuation according to the 7 years Waves cycles and after that major corrections of Indian Stock Markets in following manner:-
1- In 1992- BSE Sensex rose from 1957.33 on 01-01-1992 to 4467.32 on 22-04-1992 and after corrected to 2036.81 on 26-04-1993.
2- In 2000- BSE Sensex rose to 5518.39 on 10-01-2000 and after corrected to 2651.78 on 24-09-2001.
3- In 2000- Nifty- Wave-1 beginning at 854.20 on 21-09-2001(all time lowest formation after world trade center attack on 11-09-2001) .
4- In 2008- Nifty rose to 6357.10 on 08-01-2008 and after corrected to 2252.75 on 27-10-2008.
5- In 2015- Nifty rose to 9119.20 on 04-03-2015 and after corrected to 6869.00 on 12-02-2016 and no confirmation of correction completion yet.
On Long Charts now corrective Wave-4 is on which is correcting that impulsive wave-3 which started from 4531.15 on 20-12-2011 and completed at 9119.20 on 04-03-2015. Fibonacci Retracement levels of Wave-3(4531-9119) are as follows:-
1- 13.0%-8522
2- 23.6%-8036
3- 27.0%-7880
4- 38.2%-7366(Crucial)
5- 50.0%-6825(Crucial)
6- 61.8%-6283(Crucial)
7- 70.7%-5875
8- 76.4%-5613
9- 78.6%-5512
10-88.6%-4531
Corrective Wave-3 of Wave-C continuation with recent bottom formation at 6869.00 on 12-02-2016 and no confirmation of its completion yet. 50.0% Retracement level is at 6825 and if Wave-C corrects 161.8% of Wave-A then correction may remain continued up to 6747 also. As these 2 levels are crucial and if consolidation develops between or near about 6747-6825 then on going Long Term Correction completion possibility will be considered.
Although flat closing amid intraday high volatility last Friday but whole day good consolidation patterns formations therefore emergence of Pull Back rally possibility in the beginning of next week towards following next resistances:-
1- 7121-7185
2- 7220-7321
3- 7480-7512
As recent bottom(6869) is just above next most crucial levels(6747-6825) and some consolidation also seen just above it in last 2 sessions therefore signals of consolidation process beginning. 11 Months correction requires equally good consolidation and until that will not happen till then fresh rally after correction completion can not be considered. Pull Back rally is expected in next week because last 2 sessions intraday consolidations and Oscillators are in Oversold zone but Trend Reversal will get confirmations after sustaining above mentioned most crucial levels.