WILL NIFTY CROSS THE HURDLE AT 5600? WE DON'T THINK S0.

                Last week nifty opened at 5436.50 & went up on the same day to mark the high at 5537.30. It then went down for the whole of the week to register the low of the week at 5366.40 to finally close the week at 5373.70.Thus it lost 71.70 points over the previous week which is 1.3%  approximately.

RETROSPECT: - Last two weeks we have not entered any positions due to budget & lack of clarity. This week we have gone short at 5400 level with the stop of 5535 & looking for the initial target of 5200 & then lower.

SENTIMENTS: -  Negativism in the sentiments has certainly reduced with the  budget uncertainty behind us.However the domestic realigning of of political equation,middles east crisis, japanese eartquake-tsunami & boiling crude have wiped out any positive impact.On the contrary the impatience or anxiety of the stock owners have increasingly visible on the charts.

ELLIOT WAVE THEORY: -  Last week we had shown two alternative wave counts from the top of 6338 in green & black colors & reported that black color wave count is as good as  negated with probability below 10%.The inability on the part of index to cross above the 5600, has virtually made the green color wave count as the most probable wave count. Till the nifty crosses decisively above the 5800 black color wave count will remain lower probable wave count. For the coming week we will  watch the 5535-5565 zone closely. In case 5365 is breached & nifty starts descending down then it will be clear bearish case. In case it crosses the 5535-5565 but do not go far beyond 5610 then again it is the bearish case but it will make sideways movement for some more time. Only decisive cross above 5690 & reaching above 5800 will establish the bullish trend.

    On the shorter term chart we have taken the 5177.70 as starting reference point. We have shown two probable wave count in green & black color. The green color wave counts essentially portrays the FLAT corrective pattern in Elliot wave theory. This we are taking as high probability wave count as the momentum in rise from 5232 is

lower & waning compared to rise from 5178.The post pattern behavior from the 5608 also tilt in the favor of green color wave count. Essentially for the same reason black color wave count is assigned low probability. However if it picks up the momentum & reaches around 5800 then it will become the high probable wave count. Alternatively the breach of 5232 will negate the black color wave count.

SECTOR ANALYSIS:- We intend to analyze the AUTO sectoral index.At 8485 it has already corrected 2000 points from the top of 10537 around 20%.However the weekly  stochastics have gone down below 20 for the first time since March 2009 & looks to stay there for some more time.This implies there will be further erosion in value & our estimate is around to 7000.This is equivalent to another 20% from the present value.We advise profit booking on this sector.

JAPANESE CANDLESTICK:- In weekly chart it has formed the BEARISH HAMMER PATTERN.This is bearish & would look for confirmation in the coming week.

CHART PATTERN:-  There is no significant chart pattern visible.

OSCILLATORS READING:-  The daily RSI,STOCHASTIC & MACD have  turned up from heavy short sold level. In the weekly chart oscillators are down indicating the medium term too has entered downtrend.

STOCK RECOMMENDATIONS:-  Since there is no clarity for the direction of market & tilts in favor of bearish we would like to avoid giving any recommendations.

PULSE-READING:-  JKD SOUL VOICE SAYS TRADE ONLY IF YOU CAN SWIFTLY MOVE IN & OUT & DO NOT HESITATE TO EXECUTE STOPLOSSES.OTHERWISE WAIT TILL THE JAPAN & LIBYA CRISIS & CRUDE COOLS DOWN.

OUTLOOK & STRATEGY:-  WATCH THE 5535-5565 CLOSELY.RETURN PRIOR TO THIS ZONE IS CLEARLY  IMMEDIATE BEARISH.TOUCHING 5535-5565 BUT NOT CROSSING 5690 INDICATES BEARISHNESS AFTER SOMESIDEWAYS MOVEMENT.BULLISH ON CROSS ABOVE OF 5690.WE WILL TREAT 5690-5535 AS TRADING RANGE & BELOW 5360 BEARISH.

THIS IS THE PORTRAY OF GENERAL BROADER MARKET VIEW WITHOUT ANY SPECIFIC STRATEGY & SHOULD NOT BE CONSTRUIED AS SPECIFIC CALLS.FOR THE MORE POIGNANT VIEW ON MARKET,WINNING STRATEGY & PIN POINT TIMELY PRICE LEVEL CALLS, CONTACT US  TO SUBSCRIBE FOR OUR PREMIUM SERVICES.           

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