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  WILL NIFTY CROSS 5452 TOP ONCE AGAIN ?

      Last week nifty opened at 5352.25 & went down to register the low of the week at 5351.60.It then rose to mark the high at 5453.45 & finally closed the  week at 5393.90.Thus it gained 41.45 points over the previous week which is 0.9%.

RETROSPECT: - Book profit on all longs & remain on side lined till the break out confirmed on either side.

SENTIMENTS: - Last week's positive sentiments received the jolt with the Infosys results & again failure of nifty to sustain above the 5400 territory.However the TCS  result has been soothing but the Friday GLOBAL  decline can take it,s own toll.

ELLIOT WAVE THEORY: - Last week on a half day chart we had given the two probabilities of wave counts in green(bullish) & red (bearish) colors. The price action of last week has clearly negated the bullish wave count & gone in favor of bearish wave count. However even with the new 52 week high, is falling short of the required clean sweep bull market as it is dithering in & around the 2-4 trend line denoting waning momentum.  The upside momentum has failed to develop &  would not develop even if market makes one more high above 5453.45 in coming week. This is the red flag caution for  bulls  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.

A BREACH BELOW THE LEVEL OF 5360 WILL BE THE FIRST SIGN OF TOP BEING FORMED & BREACH BELOW 5210 WILL BE THE CONFIRMATION OF THE TOP FORMATION AS WELL AS DOWNWARD COMMENCEMENT OF THE WAVES.THIS WILL BE CORRECTING THE RISING WAVE OF 2925 POINTS SPANING OVER 16 MONTHS.THIS IS THE INDICATION OF THE MAGNITUDE & DURATION OF THE CORRECTION LIKELY TO SET IN.HENCE WE ADVISE TO LIQUIDATE ALL LONG POSITIONS UNLESS THE SPECIFIC STOCK  DISTINCTLY DISPLAY THE BULLISH PATTERN.

JAPANESE CANDLESTICK:- Last week it has formed the type of SHOOTING STAR pattern & it is likely to be bearish.

CHART PATTERN:-  The rising wedge pattern in the weekly chart is still valid & break out will be confirmed on breach of 4900.

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 5360 for downside  & follow the break out. Ideally market is preparing for big break out & be prepared for it.BEWARE OF TRAP OF FALSE BREAK OUT ABOVE 5420.