NIFTY IS HEADING TO CROSS 5180. 

Last week market opened at 4966.50 & went up to 5079.30 to mark the high of the week.It then continued to decline to register the low of the week at 4932.80 & finally closed the week at 5052.45.Thus it gained 53.50 points during the week over previous week’s closing.This is approximately 1.0% swelling in value. 

RETROSPECT: - Last week we continued to hold the long position of 4865 with the stop of 4612.

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 was ambiguous & we could not say with certainty whether it was in three wave or five wave.The subsequent rise from 4538.50 had been equally swift in comparision to decline & sustained above 4900 for the whole of the last week..This has enhanced the probability of bullish wave count shown in black color to 85%.Accordingly the bearish wave count shown in the maroon color has reduced the probability to 15% virtually ruling out the wave count.Since the black color wave count has become near certainty & nifty poised to cross 5180 it is likely to follow the either of the two wave trajectory.The first one with the wanning momentum is shown in the blue color which may not be able to drag nifty far beyond the 5300.The second one is with the accelerated momentum & volume may drag nifty to 5890 or above & has been shown in purple color.We will be watching this closely in coming weeks & take judicious wave count accordingly. 

JAPANESE CANDLESTICK:- Last week we had talked about the inverted hammer in weekly chart with the bottom of 4538.The bullish impact of the same is contiued & shown as the another white candle.

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.