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WILL NIFTY CROSS THE 4731.45 DECISIVELY? 

Last week market opened at 4486.50 & went down till 4359.40 to mark the low of the week.It then continued to rise to register the high of week at 4619.00 & finally closed the week at 4580.05.Thus it gained 78.65 points during the week over previous week’s closing.This is approximately 1.75% swelling in value. 

RETROSPECT: - We are holding the nifty long of 4440 with the stop of 4400 after the hit of the two whipsaw stoplosses.

SENTIMENTS: - Market sentiment is bearish but less compared to last week.Mainly for two reasons.First the signalling of reform with direct tax proposals & secondly the world market has taken upward u-turn. 

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 4360 & keep moving on upside.In the second scenario it should fall vertically & breach 4360 immediately with the target zone near 3900.However we rate the probability of fifth wave extending as well as subdividing as 90% & fifth wave completion as 10%.Down below we have given the hourly chart  where we expect that on first two days it will challenge the 4731 & last two days it will react during the coming week.
 

JAPANESE CANDLESTICK:- The daily chart has formed the morning star pattern.It is the most reliable reversal japanese candlestick pattern which contains confirmation of the pattern within it.In fact such pattern was formed at the 3900 level & we saw rise of 800 points in 16 working days.An experienced eye will easily spot that current pattern has much more power than the one at 3900.Reasons sharp inverted hammer & longer confirming white candle.

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 three weeks.These are still valid. 

PULSE-READING:- JKD soul voice says that GANPATI BAPPA WILL COME WITH 4500+ NIFTY ALONG WITH LOT OF RAINS & BID US FAREWELL WITH 5000+ NIFTY ALONGWITH THE BLESSING OF 6000+ NIFTY IN 2009 ITSELF.   

OUTLOOK & STRATEGY:-

Book profit on long at 4700+ & wait for 4500 to long again.Agressive trader may short above 4750 with the stop of 4850 for the target of 4500..