NIFTY ABOUT TO COMPLETE CORRECTION OR BEAR PHASE ?. 

Last week market opened at 4633.80 & went up till 4731.45 to mark the high of the week.It then continued to decline to register the low of week at 4463.95 & finally closed the week at 4481.40.Thus it lost 155.05 points during the week over previous week’s closing.This is approximately 3.5% erosion in value. 

RETROSPECT: - Long positions entered below 4500 achieved their targets of 4700 &booked it.

SENTIMENTS: - Market sentiment has become negative mainly due to two reasons.First the last two days large declines have taken their toll.Secondly PM’s appeal to fight against the drought has impacted badly.On top of this hanging sword of swine flu has made every participant jittery. 

ELLIOT WAVE THEORY: - The stupendous surge from 3918.75 has compelled us to conclude that the new impuse wave has started unfolding.This has partly resolved the previous wave count from 2539.45.We are considering the wave (1) terminated at 3511.25 on 16^th April,2009.Similarly the wave (2) terminated at 3351.50 on 28^th April 2009,wave (3) terminated at 4693.20 on 12^th June 2009 & now the wave (4) terminated at 3918.75 on 13^th July 2009.From 3918.75 we are witnessing the unfolding of wave (5).This has been shown in chart below.

      For the shorter term we are of the view that Nifty is extending as well as subdividing the 5^th wave from 3918.75.At 4731.45 it has completed the wave (i) & wave (ii) is in progress.Alternatively it completed the 5^th wave at 4731.45.In the first case it should not violate the 4420 & keep moving on upside.In the second scenario it should fall vertically & breach 4420 immediately with the target zone near 3900. 
 

JAPANESE CANDLESTICK:- The PIERCING LINE bullish candle is still valid.

CHART PATTERN:- In the weekly chart there are two patterns visible.First there is flag formation & second the inverted head & shoulder pattern.These were reported last two weeks.These are still valid. 
 
 

PULSE-READING:- JKD soul voice says that stay aside till the confusion of monsoon is over. 

OUTLOOK & STRATEGY:-

Trade long if 4420 is held with the stop of 4400.Short if 4400 is broken with the stop of 4550.