WILL NIFTY CROSS 5400? YES, NOMINALLY & NOT DECISIVELY.

      Last week nifty opened at 5237.00 & went down to register the low of the week at 5225.85.It then rose to mark the high at 5359.55 & finally closed the  week at 5352.45.Thus it gained 115.35 points over the previous week which is 2.3%.

RETROSPECT: - Our shift to under exposure or no exposure is probably the call of the market conditions.

SENTIMENTS: - Global markets rebounded last week with much greater vigour in the second half of the week.The reflection of this was partly seen in our market as we did not declined that severly along with the global market. This has impacted the sentiments  positively.However the impending earning season uncertainties have capped the tilting the balance.We will say sentiment is cautiously positive.

ELLIOT WAVE THEORY: - Last week on a half day chart we had given the two probabilities of wave counts in blue(bullish) & red (bearish) colors. The price action of last week has clearly negated the bearish wave count & gone in favor of bullish wave count. However the upsurge of last week ,is falling short of the required clean sweep bull market as it is dithering in & around the 2-4 trend line denoting waning momentum. If the upside momentum do not develop in coming week then bulls need to be cautious as it will be terminating a larger pattern of a DIAGONAL TRINGLE on upside. In turn this DIAGONAL TRIANGLE is TERMINAL PATTERN of still larger degree five wave pattern which commenced from 6th MARCH 2009.We have shown this DIAGONAL TRIAGLE in daily chart & larger FIVE PATTERN in weekly chart below.

JAPANESE CANDLESTICK:- Last week it has formed the type of bullish engulfing line pattern which covered the previous two weekly candle & denotes bullish bias for coming week.

CHART PATTERN:-  In the daily chart a bullish flag formation has  broken out on the upside.However on the larger weekly chart it forming a RISING WEDGE formation which though not broken downside,will cripple the run of the flag break out.

OSCILLATORS READING:-  The daily RSI,STOCHASTIC & MACD has  turned up & indicates the short term  bullish atleast.The weekly RSI,STOCHASTIC & MACD  have remained the neutral mode & may turn up if nifty moves up with vigour.

SECTOR ANALYSIS:-  This week we are analysing the SOFTWARE sector.It has given the stupendos rise since March 2009 & weekly stochastic has never gone below 50 & weekly RSI 50 but since May 2010 it has dipped below 50 in both cases & recovered to exhibit the divergence.We are expecting a nominal above 6230 in coming to offer the multiple divergences in weekly chart.We therefore advise investord to book profit on this sector above 6230 & wait for lower levels to renter.

PULSE-READING:-  JKD SOUL VOICE SAYS THAT MARKET IS JUST RIPE TO EXHIBIT THE IRRATIONAL EXUBERANCE & RETAIL & NOVICE INVESTORS ARE ADVISED TO REFRAIN IN THIS MADNESS.

OUTLOOK & STRATEGY:-  Keep strict watch on the 5145 for downside & 5368 for upside & follow the break out. Ideally market is preparing for big break out & be prepared for it.BEWARE OF TRAP OF FALSE BREAK OUT ABOVE 5400.