FOR NIFTY 4920 IS TREND DECIDER LEVEL. 

Last week market opened at 5145.60 & went upto 5181.95 to mark the high of the week.It then continued to decline to register the low of week at 4968.45 & finally closed the week at 4997.05.Thus it lost 145.10 points during the week over previous week’s closing.This is approximately 3.0% 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.We had raised the stop of the same to 4980 last week & same was stopped out with the profit of 500+ points.

SENTIMENTS: - Market sentiment has turned sour with the last week's incessant decline.The FII were net seller through the week.The steadily building up of the momentum has collapsed & participants become circumspect.The good results announcement had no positive impact on the contrary it led to profit booking. 

ELLIOT WAVE THEORY: - The stupendous surge from 3918.75 has compelled us to conclude that the new impulse 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 wave {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 waave {B}.Since then it has been unfolding the third leg on upside which is yet to be completed.We have labelled the internal wave count in daily chart below.

Though we were assigning the higher probability of impulse wave count wanning momentum & lack breadth were of concern & we had simultaneously kept the alternate wave count.Last week it has breached the trendline connecting the 2540 & 3918 & closed below this line on last two consecutive days.These factors have enhanced the probabilty of alternate wave count though bullish wave count can not be ruled out totally.Both the bullish & bearish wave count we have shown in the daily chart in the black & maroon colora respectively.As long as the nifty remain above 4920 bullish wave count will have the higher probability.A dip below 4920 will enhance the probability of bearish wave count & bullish wave count will become alternate wave count.For the week large part of price action is likely to remain bound within the 4920-5090. 

JAPANESE CANDLESTICK:- Last week has formed the DARK CLOUD COVER & this may have bearish implications if it trades below 4945.This has been shown in the weekly chart below.

CHART PATTERN:- In the weekly chart inverted head & shoulder pattern & ascending triangle patterns have just broken out & in the midst of pull back which may easily come back to 4600-4700 levels.

RSI & STOCHASTICS oscillators are displaying the divergences in the overbought level & thus a gentle decline can be very much on the card as shown in the chart. 

PULSE-READING:- JKD  soul voice says that take profit off the table & be on the side lined till 4920 or 5122 is broken decisively on either side. 
 

OUTLOOK & STRATEGY:- We advise to watch the breach of 4920 or 5122 on either side to act with the other side as the stop. 

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