NIFTY WEEKLY REPORT (18-01-10)
WILL NIFTY CROSS 5300 THIS WEEK ?MOSTLY NO.
Last week nifty opened at 5263.80 & went up to register the high of the 5300.50.It then declined to mark the low at 5169.55 & finally closed the week at 5252.20.Thus it gained 17.45 points over the previous week which is just short of 0.3% gain.
RETROSPECT: - We had recommended buy at every dip with the stop of 5110 last week. This has been in the right direction & traders are standing with thin positive side.
SENTIMENTS: - Market sentiment is certainly optimistic with the two consecutive weekly close above 5200.With this the caution pervades all over of earning season, RBI'S credit policy,fund flow from FII,Budget bumpers & many more.
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 as five wave upside sequence. Similarly it has completed a flat pattern at 4353.45 on 19th Aug,2009 & in accordance with the previous labeling it will be labeled as wave 2 .From 4353.45 it has unfolded the third leg of the rise till 5181.95 on 20th Oct,2009.Accordingly we have labeled this as wave 3. From the top of the 5181.95 it has declined to 4538.50 in 10 trading sessions. This we labeled as the wave 4.From the 4538.50 we are viewing as the resumption of wave 5.
The wave 5 can have two forms. The first & less probable one is the diagonal triangle formation & this should not cross 5320 in any case otherwise wave count will be negated. This has been shown in green color on the chart. In the second wave scenario at 5138 the first leg of the wave 5 terminated & at 4943.95 the second leg terminated. Since then it is unfolding the third leg of wave 5.For this wave count to be valid it must cross 5320.This has been shown in maroon color on the chart. The target of this third leg comes anywhere above 5500.The last week's market action has neither confirmed nor negated the above two wave counts .A breach below of 5150 will negate the bullish second wave count & a clean move above 5320 will negate the diagonal wave count. On the shorter term perspective we see nifty will make a failure attempt to cross 5300 which at best may not cross 5330 & then react to in & around the 5200.
JAPANESE CANDLESTICK:- Last week it has formed the third small candle in continuity of long white MORUBZU of prior week.This indicates the upward move's continuation.
CHART PATTERN:- There clean ASCENDING TRIANGLE FORMATION has emerged as shown in the weekly chart above.This triangle formation has just broken out.However the run away phase post break out has been eluding us.Hence we have to restrain ourselve from confirming the pattern.
PULSE-READING:- JKD soul voice says that just watch the FII INVESTMENT figure,earning season figure & Government annoncement for the future course of nifty in coming weeks.
OUTLOOK & STRATEGY:- Buy at every dip below 5320 with the stop of 5150 & on cross of 5320 just do the momentum buying with the appropriate stop. Do not remain on long side below 5110.
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