IS NIFTY VERY CLOSE TO VERTCAL FALL? 

Last week market opened at 5108.85 & went down to 5051.55 to mark the low of the week & went up to 5182.55 to register the high of the week.Finally closed the week at 5117.30.Thus it gained 8.90 points during the week over previous week’s closing.This is approximately 0.2% gain in value. 

RETROSPECT: - Last week our short position  of nifty was stopped out at 5165.

SENTIMENTS: - Market sentiment has been quite confused & apathy towards the trading was pervading all over. 

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.Since last week it nominally crossed the top of 5181.95 by registering the high of 5182.55 on last Friday, the decline from 5181.95 to 4538.50 should be considered as 3 wave structure.This also rules out the larger corrective wave count from 3918.75.Now we are left with only two probabilities.First at 5182.55 the five wave structure from 4806.70 is complete & it should be retraced it completely in lesser time than what it took to form.Augmenting this logic it may have completed the five wave from 4538.50,3918.75 &2539.40.Declines can be ferocious in increasing order.Second it is forming flat correction of wave 4 & at 5182.55 it was just the b wave.In this case decline will be quite normal & may reach around 4550.Both the probabilities are shown in black & blue color respectively. 

JAPANESE CANDLESTICK:- In the daily as well as weekly chart it has formed the DOJI & this indicates the severe indecision. 
 
 

CHART PATTERN:- There is a double top formation at 5180 in very nascent stage & willemerge only after good decline below 4800 & will get confirmed on breach of 4538. 

PULSE-READING:- JKD  soul voice says that nifty is very close to vertcal fall & DE DHAN DHAN will start. 

OUTLOOK & STRATEGY:- Short nifty with the stop of 5165for the initial target of 4800 & lower.