FOR NIFTY 4660-4680 IS TREND DECIDER RANGE. 

Last week market opened at 4977.15 & went upto 5033.75 to mark the high of the week.It then continued to decline to register the low of week at 4687.50 & finally closed the week at 4711.70.Thus it lost 285.65 points during the week over previous week’s closing.This is approximately 5.7% erosion in value. 

RETROSPECT: - Last week we had said that below 4920 the bullishness of the present rise will terminate & market will swiftly move down to 4680-4730 levels.It actually did the same thing & hinging at the 4700 levels.

SENTIMENTS: - Market sentiment has turned extremely bearish & participants have started comparing this with the Jan 2008 decline. 

ELLIOT WAVE THEORY: - The stupendous surge from 3918.75 has compelled us to conclude that the new 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 wave {B}.From 4353.45 it has unfolded the third leg of the rise till 5181.95 on 20th Oct,2009.Accordingly we have labelled this as wave 3 or wave {C} of the zizgzag.
 

From the top of the 5181.95 it has been declining for the last 9 days & registerd the low of 4687.50.So far there are no symptoms available for rejection of either of these bullish & bearish wave counts.The bullish wave count has been shown in the black color & it should not violate 4660 in any case otherwise whole of the scenarion may get cancelled out.Similarly above 4960 the bearish maroon color wave count will get cancelled out.Between 4660-4960 both the wave count will remain valid & we will have to go with this.  

JAPANESE CANDLESTICK:- Last week it has formed the long MORUBOZU black candle.This has confirmed the previous week's DARK CLOUD COVER pattern.This has bearish implication.

CHART PATTERN:- The range of 4670 -4730 has acted as tough resistance zone in Aug 2008,June 2009 & Aug 2009 & then it was breached on upside to reach 5180.As this has been declining from 5180 it is expected that it will find good support & resist any further decline. 

PULSE-READING:- JKD  soul voice says that take profit off the table & be on the side lined till 4650 or 4975 is broken decisively on either side. 
 

OUTLOOK & STRATEGY:- We advise to watch the breach of 4650 or 4975 on either side to act with the other side as the stop. 

_______________________________________________________________________________________________________

[DISCLAIMER]
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.