NIFTY DEJA VU

Hi Friends,

It has been a challenging Market for traders with daily Gap Ups 0r Gap Down in Nifty. The trend resumed down since late July. And there is no respite to Bulls. Earlier the Broad Market was slashing hard and later Index too started slashing harder. One question which everyone asking is "How much lower it will go?" In Bear Market nothing is too low. The Trend continues until there is a selling climax and the sentiments are extremely negative.

Currently sentiments are negative with lot of negative News from Domestic and Global front. Today morning Nifty witnessed a heavy sell off and next month Future Premium almost vanished during the sell off..
And now when market has dropped almost 1000 points in a month traders are expecting further downside to 4800. All these factors somewhat reflect the signs of Panic Bottom.

With the hammer on Daily chart and Positive Divergence on RSI some trend reversal looks round the corner. Though currently there is no evidence of reversal.. The Trend will change upon breakout of the falling channel.

NIFTY

Lets focus on some Interesting observations I have come across. In the above chart look at the comparison of the current fall to that of Early 2011. EW wise current fall form 6229-5118 looks like a larger corrective (w) similar to that of 6338-5178.. In 2011 wave 'b' inside (w) retraced 78.6% of wave 'a' and then 'c' almost retraced 161.8% of 'a'. Current fall looks similar with 'x' retracing 78.6% of w and 'y' almost done 161.8% of 'w'. So the larger degree (w) looks complete today and downside from here looks limited to 5023 which is exact 161.8% of 'w'. 

The trend will change only upon breakout of the falling channel. And then Nifty may retrace this entire fall by 61.8-78.6% similar to that of 2011 in (x) wave.. There is no hard and fast rule as to how much (x) may retrace. But technically higher end f the larger channel shall be the tgt of this (x) wave. So upon reversal we may expect pullback upto 5800..


Thanks & Regards,

Harsh Dixit.

EW ANALYSIS OF FEW STOCKS

Hi Friends,

Today, I'm posting my EW view on few stocks.

Axis Bank

A clear 5 wave in Wave 1/A seems over. As long as it holds 950 pullback in wave 2/B towards 1160 or 1250 on cards.

HDFC Bank

Corrective decline seems over. As long as it holds 560 a pullback towards 640 seems to be on cards..

HDFC LTD

Corrective decline seems over. As long as it holds 700 a pullback towards 800 seems to be on cards.

ICICI Bank

A clear 5 wave in Wave 1/A seems over. As long as it holds 790 pullback in wave 2/B towards 915 or 960 on cards.

IDFC

As long as it holds the channel support of 95 a pullback towards 115 or 120 seems to be on cards.

LIC Housing Finance

As long as it holds 150 a pullback towards 185 or 195 seems to be on cards.

ITC

The stock is consistently in uptrend. Correction in IVth wave seems over and as long as it holds 305 it might head up to 370-380 in Final Vth wave.

Infosys

Time to move out of I.T. stocks. Infosys still might have upside towards 3200. But post this Rally A huge decline to 2200 seems to be on cards.

HCL Tech.

Another stock which is consistently in Up Trend. The stock still may have upside to 1000. However any rally shall be used to exit longs.

Maruti

A 5 wave decline in wave 1/A seems over. As long as it holds 1250 a pullback upto 1425-1460 seems to be on cards.

Coal India

A larger Corrective decline seems over. As long as the stock hold channel support of 245 a huge bounce upto 310 or 330 seems to be on cards.

DLF

A Clear 5 wave decline from 290-120. As long as it holds 139 pullback to 175-185 seems to be on cards.

JP Associates

Extended 3rd wave seems over. A pullback in 4th wave to 41 seems to be on cards.

Jindal Steel

Extended 3rd wave seems over. A pullback in 4th wave to 260 or 290 seems to be on cards.

Tata Steel

Another Metal Sector stock in Bear grip. Currently seems to be in 'B' of Y.. A relief rally towards 290-325 seems to be on cards.


Thanks & Regards,

Harsh Dixit.

WORLD MARKETS

Hi Friends,

Today I'm posting my Counts on some Major World Markets..

NIFTY

NIFTY

On Friday Indian Markets witnessed a rare event of a slide of more than 230 points on Nifty and 750 points on Sensex. Such a panic fall was last witnessed in Sept 2011 and during the Bear Market of 2008..

Well another rare event which many might have observed is the Divergence within the two major Indexes Nifty & Sensex.. While Nifty has made a lower low than 21st June, Sensex has managed to protect this low.. Such a positive divergence often is an Indication of possible trend change..

Nifty has weekly channel support near 5460 as well as the base channel support. As long as Nifty holds this support a large rebound upto 5900 or even 6000 is expected. Currently I'm keeping the counts floating as it is more imp. to identify the trade setup than a wave count..

So one needs to observe the behavior of market for next two days to take a trade.. As I have a Bullish bias I would look for 2 signs to take a long trade.. 
1. Nifty holds 5460 on closing basis on Monday.
2. Crosses 5620-60 and sustains above it..


DJIA

DJIA

DJIA seems to be in Expanding Pattern ever since it completed it's Super Cycle Degree wave 5 in 2000. As mentioned in my previous post the Rally from 2009 lows seems to be a Corrective Rally and not a Directional move or Impulse.

The Rally seems to be in Final Phase with Intermediate Degree (Y) seems to be in play.. As long as DJIA holds channel support near 15070 it is expected to move higher to 16000 before it starts moving downwards..

Only a close below this channel would invalidate any further upside. In that case I would be looking for a larger fall..


DAX

DAX

Germany DAX seems to be in huge sideways pattern since 2000.. Currently it seems to be in Cycle Degree Wave 'D'.. With Z underway inside(Y).. 

DAX still has upside potential towards 8800. Close below 8100 will be Indication of a Next leg downward in Cycle Degree E Wave which could take the Index towards 5000.


FTSE 100

FTSE 100

FTSE 100 seems to be in huge sideways pattern since 2000.. Currently it seems to be in Cycle Degree Wave 'D'.. With Intermediate Degree (Y) seems to be in play.. 

FTSE 100 still has upside potential towards 6900. Close below 6100 will be Indication of a Next leg downward in Cycle Degree E Wave which could take the Index towards 4000.

Thanks & Regards,

Harsh Dixit.

NIFTY- LATE REALIZATION OF A BEAR MARKET

Hi Friends,

After making series of higher highs and higher lows throughout 2012 Nifty has finally made a lower high and lower low Indicating a Bear Market. However, this is late realization of Bear Market. While Index Topped out in 3rd Week of May 2013 Broad Market already Topped out in 1st week of Jan 2013. While Nifty/Sensex lost only 12% Small & Mid Cap Stocks, PSU Banks, Infra, Metals etc. are 30% to 50% down from their 52 week highs. So basically Nifty is not reflecting a True Picture of Broad Market as Stocks and Index are not in Sync.

I had been warning about possible Market Top since late Dec 2012. And had been mentioning about possible decline to 4500 on Nifty since then. Though Nifty haven't dropped to 4500 yet, many Small & Mid Cap Stocks and even Blue Chip Stocks have dropped to 4500 and 3500 levels of Nifty. Some Blue Chip Stocks like BHEL, DLF, IDBI, JP Associates, SAIL, Tata Steel are near 2500 level (2009 lows) on Nifty..

Short Term -

NIFTY

In my recent post I mentioned about alternate Count of Running Triangle on Nifty which had support near 5630 level. However, Nifty has Invalidated that Count as it broke below important mark of 5600-5570. So I would stick to my preferred Wave Count. 

In my previous post near 6000 in July I had mentioned about minimum possible decline to 5430. Nifty has almost achieved Wave Equality and it has Support of Parallel Channel near 5460. As long as Nifty holds this Support a Huge Bounce back to 5860 or even 5930 can be expected. For this initial indication would be  break above 5660.. This Bounce could be very sharp and might take bears by surprise. However, this would provide another shorting opportunity for a larger fall later in Sept-Oct..

The Oversold Sectors Like PSU Banks, Metals, Infra etc. might help to push Index Higher. Even though these stocks are likely to fall more later in the year; some huge bounce might be on cards to pull these stocks from oversold zone. In Desi Terms - "Mare Huo ko aur kitna Maroge??.."

Long Term -

Though a in short term there might be a pullback in Market, I would like to stick to my Bearish views for next 12 months. Looking at the damage done to the Broad Market someone would ask which stocks will take Index to 4500 levels. Well when I mentioned about 4500 levels on Nifty, I had a view of about 40-60% decline in most of the stocks. Many stocks are already down about 30-50% and they are likely to fall more. Index is still at 5500 level due the some heavy weight stocks which are still at highs. So in next 12 months even if Index doesn't fall to 4500 level. It is expected to touch at least 4900-5000 and may trade sideways to down over a year. If Nifty has to Fall to 4500 or lower heavy weight stocks like HUL, ITC, HDFC, HDFC Bank, Infosys, TCS, RIL, SunPharma, Tat Motors etc. will drag Index lower.. These stocks are expected to fall 30-50% over next 12 months..


Thanks & Regards,

Harsh Dixit.

NIFTY

Hi Friends,

NIFTY

In my last post I mentioned about possible decline once Nifty starts trading below 5930. Within 9 trading sessions Nifty Declined more than 400 points. This Fall was very Destructive without any sizable pullback. Many Stocks crashed heavily. Except I.T. almost all the other Sectors crashed badly. As expected even the Defensive Sectors like FMCG & Pharma started Declining. And Auto, Banking, Capital Goods, Infra, Metals, Small & Mid Caps witnessed massive decline.

With this Massive Decline Lots of Stocks are reaching Oversold zone and forming RSI Positive Divergence. Nifty too forming RSI Positive Divergence on hourly chart. So some Sort of Rebound or Relief Rally is due on Nifty and Stocks.

Nifty has Strong Support Near 5630-50, which is expected to be held. As per my preferred count I'm expecting a Pullback to 5810-5860 over a week.. And Nifty May continue to go lower after this pullback.. Only in case Nifty gives Fast Rally above 5930 I would like to consider alternate count. As per alternate count Nifty still might be in its 'D' leg starting from 6111.80 which might be developing as Running Triangle.

While Nifty is at 5700 most of the Stocks are at 4500 levels. With lots of Sectors being oversold I would not be surprised to see the alternate count working. Sector Rotation has been the key for Traders over last Few Months. So if someone expecting a Larger Rally in Nifty as suggested by alternate count - Oversold Sectors may contribute for the same. Still one should do Independent Study of Nifty and Sectors/Stocks as there is lot of Divergence within Sectors/Stocks and Index..


Thanks & Regards,

Harsh Dixit.