16 November 2012

NIFTY - SETTING BASE FOR YEAR END RALLY

Hi Friends,


NIFTY

In last post I had mentioned about Diwali Rally to 6040. Though Nifty initially broke above the consolidation channel, it could not sustain & fell back sharply. So Nifty is still in 4th Wave which might get over in a day or two.

As suggested by EWT Corrective Waves generally take more time than Motives. Wave 3 Took 20 Days. Hence, Wave 4 shall consume more than 20 Days. Wave 4 has so far consumed 28 Days. And it might consume 1 or 2 days more to complete.

Wave 2 was Running Correction & Wave 4 looks to be a Flat. Wave 2 Retraced up-to 50% which is a Deep Correction. Hence, Wave 4 shall be a Shallow Correction & Retrace up-to 38.2%. A Flat represents a Shallow Correction. More of Time wise Correction than Price. And often witnessed in Wave 4.

Nifty has Strong Rising Channel Support near 5575 & 38.2% Retracement of Wave 3 is at 5585. Hence, Nifty is likely to hold this Support & Ride Higher in 5th Wave to 5944-5976-6040 till Dec last week.

This view will hold true until Channel Support is held. If Channel Breaks I would look for some alternate Count.

Currently I remain Bullish for Year End Rally. This Rally might be the last Run up on Nifty & try to Trap most of the Long Term Investors by heading beyond their Imagination. But Investors must use this Rally to Exit Longs.

Banking, Capital Goods & Metal Sectors will Outperform this Rally. Auto may remain Sideways to Bullish. FMCG & Pharma Sectors seem to have already made a Cycle Top & will give only Corrective Bounce.


So lets wait & watch..


Thanks & regards


Harsh Dixit.