Technical Analysis,Research & Weekly Outlook
(Nov 05 to Nov 09,2012)
Nifty-EOD Chart (02-Nov-2012):-
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Technical Patterns and Formations in EOD charts
1- 4531.15 on 20-12-2011(Long term correction completion and Wave-1 beginning)
2- 5629.95 on 22-02-2012(Wave-1 completion and Wave-2 beginning)
3- 4770.35 on 04-06-2012(Wave-2 completion and Wave-3 beginning)
4- 5348.55 on 10-07-2012(Sub Wave-1 of Wave-3)
5- 5032.40 on 26-07-2012(Sub Wave-2 of Wave-3)
6- 5448.40 on 23-08-2012(Sub Wave-3 of Wave-3)
7- 5215.70 on 05-09-2012(Sub Wave-4 of Wave-3)
8- Sub Wave-5 of Wave-3 completion at 5815.35 on 05-10-2012
10- 19 Sessions sideways correction between 5583-5815.
11- 28 Sessions sideways trading between 5583-5815.
11- 28 Sessions most time trading between 5639-5733.
12- Previous 4 weeks correction.
Conclusions from EOD chart analysis
Long Term Trend is up and intermediate term trend is sideways for the last 28 sessions between 5583-5815 and finally sustaining beyond this range will blast Indian markets towards break out direction. As higher levels strong resistances are between 5700-5733/5756/5815 and supports have shifted toward lower range between 5583-5615 therefore now next moves confirmation range is sustaining beyond 5583-5815.
Financial markets are tend to react on news and break out from a range can be seen also after any big news and same happened in last week when Nifty forcefully moved below the lowest of sideways trading range(5639) after RBI Credit Policy announcement as well as again jumped into range(5639-5733) after strong Global markets last Friday. As breaking out/down technical confirmation is must therefore following 2 filters have to be watched first:-
1- 3 Days sustaining beyond the previous trading range.
2- Minimum 3% up/down moves from the high/low of the previous trading range.
As Indian markets reentered between previous most time trading range(5639-5733) last Friday without fulfilling the conditions of above mentioned 2 filters therefore breaking down of 30-10-2012 was false and not valid. Markets take its own time in finding its direction therefore turns sideways and prepare for next moves. Now sideways trading range of Nifty is 5583-5733/5756/5815 and supports/resistances within this range are as follows:-
1- Supports are between 5583-5615.
2- Strong resistances are between 5700-5733.
3- Next resistances are between 5736-5756.
4- Next resistances are between 5778-5815.
As multiple resiistances are between 5700-5815 therefore complete consolidation is required for sustaining above 5815 but strong resistances are between 5700-5733 and once sustaining above 5733 will mean first indication of rally. Supports are lower levels are not as much strong and once confirmation of sustaining below 5583 will mean deeper correction also.
Let market complete its preparation process between 5583-5815 and till then trading targets should remain within this range only but more than 10% fast moves will be seen after the break out/down of this range because:-
1- Sideways market is 28 sessions old now and sustaining above 5815 may also mean that Corrective Wave-4 completion within sideways moves and eruption of impulsive Wave-5 strong rally.
2- Sideways market is 28 sessions old now and sustaining below 5583 may also mean that emergence of Wave-4 deeper correction after complete distribution within sideways moves as well as possibility to correct 1045 up moves of Wave-3.
