NIFTY POSSIBLE ENDING DIAGONAL

Hi Friends,

Ever since Nifty made its Low at 4770 on 4th June we have been mentioning that it is in its C leg of the Minor Degree Wave B Up. And till date its moving as per or projected path. Earlier we were thinking it to develop as Impulse. However, after the 1st leg was over at 5348 we realized that C might be developing as an Ending Diagonal a Terminal Structure. And Ending Diagonal would rather confirm that Nifty is indeed moving in C of B up. Well as of now we still don't have sufficient evidence for Ending Diagonal. But Once Nifty Completes the 3rd leg we will have that confirmation.

NIFTY-ENDING DIAGONAL

Currently Nifty looks to be in 3rd leg of the Ending Diagonal. Of which 'a' looks complete at 5449. We can clearly see a 5 Wave Rally from 5032-5449. What may follow is a 3 Wave Decline in 'b' leg from 5449 top of 'a'. Well this 'b' looks complete at 5312 today's low; as Hourly Charts show a Positive Divergence in RSI and the Fall also satisfies Kennedy's Channeling Techniques Rules. So Nifty may Head up from here in its 'c' leg of the 3rd Wave of Diagonal. However, one shall wait for confirmation by channel breakout above 5360. And also keep room for some more decline to 5289 a 38.2% Retracement of 'a' leg or Gap Area at 5245.

On pure Elliott basis a=c gives target of 5728 for the 3rd leg of the Diagonal. However, 'c' may Fall Short and achieve only 5610 or 5686. In best circumstances Nifty may go as High as 5932 in its 5th leg of the Diagonal till 5th Nov. However, we are betting for a conservative target of 5738 for the Diagonal.

The above view will hold true only in case Nifty holds above 5221. Else we would look for alternate Wave Count of Triangle in B.


So lets wait & watch..

Thanks & Regards,

Harsh Dixit.

INFOSYS ELLIOTT WAVE ANALYSIS - A LARGE FRACTAL

Hi Friends,

INFY-MONTHLY

This is the Monthly Chart of Infosys Ltd. We can clearly see the 5 Wave Bull Market Advance from 1993-94 to 2011. INFY Completed its Cycle Degree Wave 1 in Jan-2011.  We can clearly see the Declining Volume & RSI Negative Divergence Indicating End of Bull Market in Stock at 2011 High. And now the stock is Correcting this entire Advance in its Cycle Degree Wave 2 which can take the stock down to 1000 or even lower as per pure EW Guidelines.

INFY-WEEKLY

On a weekly Chart we can clearly see that prices have Fallen Below the Trend Channel of Circled Wave 5. Indicating that Cycle Degree Corrective Wave 2 is ongoing. One may argue that a 3 Wave Decline is complete at 2100 in July 2012. However, considering the Monthly Chart & Long Term Cycle the Price Pattern Implications & Price Objectives are not yet met with. So this Stock is not yet a Safe Buy for Long Term Investment.

INFY-DAILY

However, short term traders can play for possible short term moves. On Daily Chart it looks to be in its 'a' wave of the 2nd of (C) Wave of Cycle Degree 2. This 'a' may get arrested at 2540-2550. So one may like to Short this Stock after clear 5 Wave advance for 'b' of 2nd or wait for clear 3 Wave decline form the top of 'a' and play for next 5 Wave advance in 'c' of 2nd Wave up.

We would Prefer to Play for next 3rd Wave down which will be Sharpe Decline.


So lets wait & watch.


Thanks & Regards,

Harsh Dixit.

CIPLA ELLIOTT WAVE

Hi Friends,

It is very interesting to see when Market is distributing different stocks at different time. Time Cycle wise Pharma stocks are the Late Movers in Market & generally form Right Shoulder of the Market Head & Shoulder.

CIPLA

Current advance on CIPLA looks to be nothing but a corrective advance in (c) leg of the 'B' of Flat. CIPLA currently looks to be in Cycle Degree 4th Wave Corrective which is a large Fractal & might be developing as Flat Corrective.

A 3 wave move from 380-275 is marked as 'A' leg & Currently its moving in another 3 wave move up in 'B' leg. The 5th of (c) shall take some more time till mid Sept. to reach 370-380 area. Once 'B' leg is over the Stock may start drifting lower in its 'C' leg of Flat towards 275-250.

Currently we are examining this preferred Count of Flat in 4th Wave. In case of Flat C shall be a Clear 5 Wave Move Down & may take lesser time than A & B. However, we would consider the alternative of Zigzag as CIPLA starts Drifting lower towards 275 & internal legs unfold.


So strategy for Investors is to exit the longs as stock moves up.


Thanks & Regards,

Harsh Dixit.

NIFTY WEEKEND ANALYSIS

Hi Friends,

In our last post we were examining the possibility of two alternate wave counts:-
1. Zigzag in B
2. Triangle in B

Since the move from 5032 to 5400 is clear 5 wave Rally possibility of Triangle is now being ruled out.

So Nifty might be forming a Zigzag in "B" of which 'A' was over at 5499 & 'B' at 4770. Currently Nifty is in 'C' leg which might be developing as an Ending Diagonal.

NIFTY

The Rally from 5032-5400 looks to be 'a' leg of the 'C' of Ending Diagonal a Five-3 Structure.
Nifty is just closing on the edge of this Rising Channel. All longs now need to be liquidated. And a possible trade here is to remain short with stop of 5400. Fresh longs need to taken only above 5400 or after meaningful correction.

Nifty might now trade within the range of 5300-5400 for 3-4 days just like it remained Range-Bound in June after completing 'a' leg of the 'A' of Ending Diagonal.

The immediate support is placed at 5320-5330 below which Nifty may grind lower to 5289-5260. At most it may try to fill the Gap at 5246. But we still believe in a Range-Bound Price Action a Time wise Correction than much of a Price Damage..


So lets Wait & watch..

Thanks & Regards,

Harsh Dixit.

TIME TO BE CAUTIOUS

Hi Friends,

In our last update we projected this move towards 5650. So far Nifty has been moving nicely in a Up Trend Channel. We almost captured a nice 300+ points move from 5040 levels. Now its time to be little cautious.

One thing is now confirmed that we are actually in 'B' leg up of the larger Zigzag Corrective in major "C" which started in Nov. 2010. Of which 'A' leg was a Leading Diagonal or Complex Corrective. By Elliott Wave logic 'B' can either be Zigzag, Flat, Triangle or Combination. Looking at the current structure possibility of Flat is ruled out.

So there are now tow alternatives coming up:-

NIFTY - ZIGZAG

1. As per our preferred Count Nifty is in C leg of 'B' leg up which is developing as Zigzag. Though we were initially thinking C to develop as an Impulse the internal structure is not clearly Impulsive within 1st leg up. So C might be developing as an Ending Diagonal. Where all 5 legs are 3 legged structure. So it would be Aproriate to take June-July Rally as A leg & the move towards 5032 as B leg of the Diagonal. Currently Nifty is in C leg which could reach up to 5610 or higher. But for this we need confirmation above 5378 and then above 5481..

NIFTY - TRIANGLE

2. As per the next best alternative 'B' leg might be developing as a Triangle where all 5 legs are 3 legged structure. As per this alternative Nifty is in D leg of the Triangle which is developing as an Expanded Flat. A move below 5286 & further below 5261 can take Nifty to 5060 or lower to 4980 in D leg of the Triangle. Since the move in last 2 days is not clear Impulse Nifty can retest 5378 area before sliding down.

We are still going with our preferred Count and aiming for 5600+ for 3rd leg of the C of B in Zigzag. But we are cautious and all longs are to be kept with stop loss of 5280-5290.. We would go short below 5280 & add  more below 5260..


So lets wait & watch..

Thanks & Regards,

Harsh Dixit.