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If nifty crosses 3488 in the current move,door for 3900 opens up.

Last week market opened at 3211.35 & went down to 3149.25 to mark as the low of week.It continued to surge up relentlessly till 3401.25 to register the high of week & finally closed the week at 3342.05.Thus it gained the whopping 131.00 points during the week.In percentage terms it gained more than 4.03% compared to previous week’s closing.

RETROSPECT: -
 Last  week we recommended to hold on to the long nifty entered around 2960 with the raising the stop to 3150 for the target of 3450- 3500.It is moving towards it’s goal.

SENTIMENTS: -
 The market mood has distinctly become bullish with the crossing of 3240 which is at 26 week high.Most of the participants have started exploring at which level to buy compared to previous tendency of exploring the short sell opportunity.It is heartening know that participant who had full time other business & had fled away,has returned with fresh money deployment.This augurs well for the big base building of next bull market.

ELLIOT WAVE THEORY: -
 For the past many weeks we are trying to decipher the wave count from the 27 th Oct,2008 low of 2252.75. As discussed in last issue, we are left with the only two choices of flat correction or the impulse move from the 2252.75. The same has been shown in the chart below along with various Fibonacci retracements & projections.

 

However it can be seen from the chart whether it is flat correction or the impulse move the, the wave unveiling from 2539.75 should have impulsive structure consisting of five waves.Narrowing down to still shorter terms it has two probable wave counts.First one assumes that it has completed wave 1 & wave 2 at 3123 & 2965 respectively.This has low probability & we will keep it in abeyance till further confirmation.Second one has very high probability & assumes internal waves 1,2,3& 4 are complete at 2965.The wave 5 has to extend & subdivide to reach minimum 3532.Within wave 5 internal wave i& ii are complete & iii is on.Unless wave iii crosses 3488 on Monday, extension within extended wave 5 can not take place.In case of extension within extension we see market in coming weeks 3950-4150 & with simple extension it is 3525-3600.We have to keep our fingers crossed till market unfolds.However the psychological syndrome points for bright chances of extension within the extension, a phenomenon only associated with the impulse waves.

JAPANESE CANDLESTICK:-
As shown last time we had pointed  the PIERCING LINE CANDLE in the weekly chart.This time below we have shown the PIERCING LINE CANDLE in monthly chart.Once a pattern which emerges in lower time frame & again resurfaces in higher time frame chart it only reflects it’s power & potential.




CHART PATTERN:-
As shown in the weekly chart last week, the envisaged double bottom has been confirmed as it has surpassed the level of 3147.The target of this pattern comes at 3800 & market is well headed for the same.As shown above in monthly chart the stochastic has for first time since Jan 2008 has started rising & has left behind the oversold zone.

PULSE READING:-
 This has no logic,theory,data or system.It is the experience coupled with the sound of soul.JKD’S pulse reading stated in plain words, market seems all set for the vertical break out & may touch the 3950-4150 range.This up move is neither likely to be short lived nor due to short covering.It will be  because of scramble buying by funds who were sitting on cash or preferred to remain side lined.