FLIRTING OF NIFTY WITH 5000 MAY CONTINUE FOR A WEEK? 

Last week market opened at 4977.10 & went UP to 5036.30 to mark the high of the week.It then continued to decline to register the low of week at 4904.05 & finally closed the week at 4976.05.Thus it lost 44.80 points during the week over previous week’s closing.This is approximately 0.9% erosion 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 jubiliant & bullish.However the fun -fare & bull roar is missing as it lacks the momentum & could not close above 5000.This slow & steady rise is casting the shadow of doubt but it is good for long run as any runaway rise gets corrected equally fast.However the massive inflow of FII during last couple of weeks should show it's fireworks sooner than later. 

ELLIOT WAVE THEORY: - The stupendous surge from 3918.75 has compelled us to conclude that the new impuse wave has started unfolding.Therefore now we will concentrate our efforts to analyze the wave count from the low 3918.75 of 13th July 2009.At 4731.45 top on 4th Aug,2009 it has completed wave 1 or A as five wave upside sequence.Similarly it has completed a flat pattern at 4353.45 on 19th Aug,2009 & in accordance with the previous labelling it will be labelled as wave 2 or B.We are expecting the third leg on upside to unfold.

It may be noted from the chart that the trajectory drawn is running at higher momentum & lesser time whereas nifty is moving with the lower momentum & longer time.This can be inferrred in two opposite ways.Firstly it is tired & distributing it.This view is not supported by the rising trendlines as well as channels since theirr base line is not breached or violated.Secondly the wave in motion is further extetending & sub dividing for the still higher targets.The pick up in the momentum will come at later stage of the wave.Last week's price action has totally negated the expected momentum lead trajectory & breached the maroon color channel as well as trendline.This has implied the mild caution on quality of uptrend as well minor alteration in wave count keeping the intermediate as well as long term wave count intact.The minor alteration in wave count as well as expected wave trajectory for the coming week has been shown below in the hourly chart.


 
 
 

JAPANESE CANDLESTICK:- There was a doji pattern last week in weekly chart.This denotes the indecision & we are expecting the nifty to remain bounded in 4900-5050 range. 
 
 

CHART PATTERN:- In the weekly chart inverted head & shoulder pattern & ascending triangle patterns have just broken out & in the midst of pull back process.  
 
 
 

PULSE-READING:- JKD  soul voice says that take the profit of the table & wait sidelined for better opportunity. 

OUTLOOK & STRATEGY:-

Our outlook is of range bound movement within 4900-5150 during the coming truncated week. 

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This Newsletter is an expression of Technical Analysis. It is NOT a market prediction. It is NOT an advisory or suggestion to buy or sell any types of securities. This is an educational and learning exercise, only to share our methods of technical analysis. Trading and Investing MUST always be done with prudent money management and use of stop losses. One Bad trade can ruin the trader, so always keep risk low. IF you do not agree with the statements mentioned herein, please close this document, do not proceed further, do not read the Newsletter.