30 January 2013


Hi Friends,

Since beginning of Jan 2013 Nifty has been trading in a tight range of 100-120 points. This has been most challenging Market for Index Traders. While Index has not moved much beyond the Psychological level of 6000 most of the Under-Performing Sectors of 2012 largely Out-performed in last 2 months. And over next 2 weeks if Nifty has further upside on cards the the Sectors which are yet to Out-perform will take the Lead.


Coming to Wave structure - I have been maintaining my stance that the Entire Rally from June Low of 4770 is a Corrective Pull Back. As per my preferred count this looks to be Wave (b) of zigzag. Zigzag correctives are bounded by Channel & as expected Nifty is taking resistance of the Larger Channel. And hence, unless & until this channel has been broken on upside I will go with the Preferred count of Zigzag (b).

On the Other hand, if Nifty breaks above this channel & most importantly above 6147 I would look for alternate count of Expended Flat (b) Wave which may take Nifty to New High.


Ignoring the Long Term Structure whether Zigzag or Flat, Nifty is in 5th of 'c'. This 5th might be developing as Terminal Triangle or 5th Extension Impulse. 

On Daily chart Nifty is making Higher Highs. However, RSI is refusing to go any Higher & making Lower Highs since last few days. This RSI -ve Divergence marks for the cause of concern. Which may be indicating Smart Money Selling to Weak Hands. Nifty has short term channel support near 6030. Breach of 6030 would open up possibility of 5th as Terminal Triangle. And breakdown from Blue Channel near 5888 would be indication of Medium to Long Term Trend Change.

On the other Hand breakout above 6147 would open possibility of 5th as an Extension Impulse. In that case Nifty may touch 6289-6311 over next 2 weeks. I will look for a New High only in case Nifty breaches 6311 which is very rare case. In case of 5th Extension Nifty will take Resistance of a Upper Trend-Line of Blue Channel.

On a Longer Time Frame Nifty is Completing 13 month Bull Cycle & Trend Change is Expected soon. Once the Cycle gets Complete Nifty is most likely to follow another 13 month Bear Cycle & hence Longs are at Extreme Risk at Current moment.

So Longs Shall be held with Stop below 6030. In case of 5th Extension I'm Expecting Capital Goods, Power & Metal Stocks to Out-Perform the Market.

So lets Wait & Watch..

Thanks & Regards,

Harsh Dixit.