NIFTY ENTERS HIGHER ORBIT AFTER CLOSING ABOVE 4860. 

Last week market opened at 4796.15 & went down to 4789.80 to mark the low of the week.It then continued to rise to register the high of the week at 5017.90 & finally closed the week at 4998.95.Thus it lgained 202.80 points during the week over previous week’s closing.This is approximately 4.2% swelling in value. 

RETROSPECT: - Last week we had suggested to watch the breachof 4860 or 4612 on either side to act with otherside as stop.Accordingly we are holding long position of 4865 with the 4612 as stop.

SENTIMENTS: - Market sentiment is not as bearish as it was last week.However the general mood is of circumspect or cauton with no action. 

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 declined to 4538.50 in 10 trading sessions.However the internal wave structure of this decline is ambiguous & we can not say with certainty whether it is in three wave or five wave.The subsequent rise from 4538.50 is equally swift in comparision to decline.This has enhanced the probability of bullish wave count shown in black color to 70%.Accordingly the bearish wave count shown in the maroon color has reduced the probability to 30%.If it crosses the 5180 by Tuesday evening then bullish wave will get confirmed otherwise we will have to wait for the further confirmation. 

JAPANESE CANDLESTICK:- Last week we had talked about the inverted hammer in weekly chart & were awaiting the confirmation with the subsequent white candle.This white candle was formed last week & thereby the INVERTED HAMMER pattern is confirmed.

CHART PATTERN:- The INVERTED HEAD & SHOULDER as well as ASCENDING TRIANGLE pattern formed & broken out are still valid  as the recent decline to 4538.5 can be called as pull back as it has swiftly pulled up. 

PULSE-READING:- JKD  soul voice says that if RIL contributes its fair share Nifty will cross 5500 & above to top out.Failure to garner fair share from RIL, Nifty may make nominal high above 5180 in the range of 5250-5300 to top out on intermediate term. 

OUTLOOK & STRATEGY:- Hold the long position of 4865 with the raisin the stop to 4920 for the minimum target of 5250 & may be 5500 or above..