WILL NIFTY HOLD 4720?

                               Last week nifty opened at 5217.35, went up to 5228.90 to mark the high of the week, went down till 4837.95 to register the low of the week & finally closed the week at 4905.80.Thus it lost 263.05 points over the previous week which is 5.25% approximately.

RETROSPECT: - On the 25^TH Oct,2011, as soon as nifty crossed 5170 & we went long at 5190 with the stop of 5120 for the target above 5450.We were stopped out at 5140 & we entered short at 5140 with the stop of 5190 for the target of 4750 or below.

SENTIMENTS:- Sentiments was turned very negative as can be seen from all the negative closing during the last week.The mid caps were mauled very badly with many loosing more than 10% twice during the week.The losses on mid cap are not reflected on the nifty index but these are so deep rooted that it will take long time to recover.  

ELLIOT WAVE THEORY:-  As explained in last few weeks we would analyse the wave count from 6338 (5thNov,2010) which suffice for our weekly insight. As the wave group are confirmed & stamped we would compact & integrate it with larger degree movements. We are labelling the 6638-5177 as the wave (A) OR (1) & 5177-5740 as wave ( OR (2).From 5740-4728 it has unveiled wave (C) OR (3) & on the chart below we have shown the internal lower degree wave count. Last week it failed to cross the falling weekly channel & reversed sharply. Till this swing unveils completely we would not be able to label the wave count. However our most probable wave count points for the at least a new low below 4720 & last week low was very close to it. For the coming week we see initially bounce to 5050-5070 & support at 4600-4620 to terminate the larger degree down wave. However such larger degree waves terminate with the lower degree wave either undershoots or overshoots & participants will have to remain prepared for this.

               For the Bank nifty the top of 11451 on 8^th July, 2011 corresponds to 5740 of Nifty essentially the other wave structure of remaining similar.

CYCLE- ANALYSIS:- We intend to give brief review of the cycle with the complete awareness that such advanced, sophisticated & complex subject is out of the purview of the weekly newsletter. We are compelled to give this analysis as the market is at such complex stage that others tools & techniques we deploy, run short to describe the current situation. We apologise to readers for the inability to provide the full details due to lack of time & space. We have deployed DIGITAL SIGNAL PROCESSING & find the first three most dominant cycles & drawn them below the chart. The thickest line is the most dominant cycle. It may be noted that net effect of these three cycles remains downward in nifty as well as bank nifty & we are inclined to believe that market will face the downward pressure at least till 29^th Nov, 2011.

SECTORAL ANALYSIS:- We intend to analyse the FMCG sector for the week. On the down below we have attached the FMCG INDEX OF BOMBAY STOCK EXCHANGE. This index had been in rising mode for last 8 months. In the last 4-5 sessions it has shown some sign of entering into corrective phase. We advise to book profit on this sector & this can be again bought back on decline to 3800-3900 levels.

JAPANESE CANDLESTICK:- Nifty as well as bank nifty has formed long MORUBAZU black weekly candle. This indicates the further accentuation of downtrend in the coming week.

CHART PATTERN:-  It has completely filled the gap it formed immediately after DIWALI VERY shortly.This has led to the failure of MULTIDAY ISLAND REVERSAL PATTERN.Any failure of bullish pattern has serious bearish implications.

OSCILLATORS READING:-  Majority of the oscillators in the daily  & weekly turned bearish.

STOCK RECOMMENDATIONS:-  

(1)On 16^th Nov,2011 we recommended a buy on CIPLA at 303 for the target of 327.It has made the high of 320 on last working day.We suggest to book profit on any rally today without  becoming stingent for the numbers.

(2)On 14^th Nov,2011 we recommended a SELL on GODREJIND at 203 for the target of 182 & on last working day it has mark the low of 181.50.Our target is achieved   & we advise booking profit on it.

PULSE-READING:-   SOUL VOICE SAYS  GAP UP OPENING AT 5400 WAS THE SUCKERS RALLY & BEAR MARKET HAS REVERTED BACK WITH THE VENGEANCE.

OUTLOOK & STRATEGY:- BEARS SHOULD COVER THEIR 50% SHORT AT 4800 LEVEL & AGAIN SELL SHORT AT 5050 OR ON BREACH OF 4700.  

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.