WILL NIFTY OFFER THE PRE BUDGET RALLY?MOSTLY NO.

      Last week nifty opened at 5034.55 & went up to register the high of the 5035.70.It then declined to mark the low at 4766.00 & finally closed the  week at 4882.05.Thus it lost 154.95 points over the previous week which is more than 3%.

RETROSPECT: - We are holding the short position of 5100with the stop of 5150.

SENTIMENTS: - Market sentiment is certainly pessimistic with utter confusion.Most of the uncertainties are behind us like earning season, RBI's credit policy & others except the BUDGET.Hence we expect some stabilsing in the market trend as well as sentiments.

ELLIOT WAVE THEORY: - As explained in our last issue a major upside pattern has terminated at 5310 & a downward pattern has been unfolding since 6th Jan 2010 onwards. It has just completed wave 1,2 & 3 of minor degree on downside & has commenced the wave 4 on upside. We expect this to come to 4966 to 5028 zone. Time duration of this is expected to be 2 weeks & by nature a flat. Simply stating we expect market to remain range bound in 4800-5050 for some more time to come.

      The same wave count & the EWT logic we have depicted below in hourly chart for the benefit of the intraday traders.

JAPANESE CANDLESTICK:- Last  few weeks pattern has worked out as the EVENING STAR,a reliable Japanese candlestick pattern.A sharp decline has followed the pattern in the last two weeks.However the last day of working on Friday has formed the INVERTED HAMMER in the daily chart as shown in the chart below.This indicates the termination of the decline & commencement of the corrective rally.

CHART PATTERN:- There is a RISING WEDGE formation emerged on weekly chart.This was confirmed by the break of lower trend line & substantial decline was seen in the last two weeks.We are expecting the pull back of this break out in the coming weeks.

PULSE-READING:- JKD  soul voice says that there would not be new high till 10th of March 2010 & 5310 will remain EVEREST TOP for the bulls till then.However for the cominh week nifty is likely to remain rangebound in 4800-50550 zone.Bank nifty will outperform the nifty hence pay extra attention on it.

OUTLOOK & STRATEGY:- Sell at every rise above 5050-5070 with the stop of 5120.