Will 3312 turn out to be a spring board support for nifty?

Last week market opened at 3342.20 & went down to 3311.80 to mark as the low of week.It continued to surge up relentlessly till 3511.25 to register the high of week & finally closed the week at 3384.40.Thus it gained the whopping 142.35 points during the week.In percentage terms it gained approximately 4% compared to previous week’s closing.

RETROSPECT: -
 Last couple of weeks we were holding the long position entered at 2960 for 3500-3525 target with appropriate stops.The target of 3500 is achieved & could exit the position successfully.

SENTIMENTS: -
The market mood is certainly bullish.However the level & momentum of upswing in nifty has compelled the so called hollow flambouyant analyst,super trader, wealth creator(damager)of electronic & print media to keep their tounge in cheek.Every participant is watching the rise of nifty with  their eyes wide open in disbelief surprise.Those who could not bought at lower level crave that it is too good to be true & this will soon collapse for them to buy at lower level.Those who bought or held are unnerved & impatient to off load at slightest rise or at smell of decline without assessing the potential of further rise.We at JKD assess this to be ideal pitch & weather conditions for bullish batsman to score century.

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 their wave counts.



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.It has then unfolding lower degree wave 1& 2.This has been drawn in reddish brown color.However it is superlatively bullish count & it has lower 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 & iii are complete & iv is on.This wave count is marked in navy blue color on chart.Since wave iii crossed 3488 on Wednesday, extention within extended wave 5 can take place.In case of extention within extention we see market in coming weeks 3950-4150 & with simple extention 3650-3700.We have to keep our fingers crossed till market unfolds.However the psychological syndrome points for bright chances of extention within the extention, a phenomenon only associated with the impulse waves.

JAPANESE CANDLESTICK:-
 As shown in the chart below last week we had a sixth bullish candles consecutively.However it has formed a shooting star type formation.This has bearish implication only once when market tends to  trade below 3312 decisively.Till 3312 is held we will take trend as up indicated by previous candles.

 

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.

PULSE-READING:-   In this section last time we had stated
                              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.
In fact we maintain the same view with the additional consoldation or correction for initial part of week.