Hi Friends,
The Rally in Nifty continued to 7560 till the BJP victory on 16th May 2014. Post event there was a sharp intra-day correction to 7130 on that day. After a correction the Rally Continued to 7500 till today. However Market again witnessed a sharp sell off today. This might be an indication of possible Trend Reversal, as Market is Highly Overbought.
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| NIFTY |
As mentioned in my previous post currently there are two alternatives open.
1) The rise from 5933 which looked like an Impulse until the Price action prior to 16th May, is actually a corrective Rally; and hence could not be considered as part of 3rd wave. The entire move from 5118-7560 might be part of a Leading Diagonal, if we consider this as a start of a New Bull Market. Currently Wave (c) of the Leading Diagonal from 5118 might have just been completed today. And a correction in Wave (d) to 6400 looks to be on cards over next 2 months. Post this Nifty May continue it's uptrend in Wave (e) of a Diagonal.
2) Another alternative of this rise being a part of the corrective wave from 4531 over last 3 years as I have been always mentioning in all my previous posts.
Currently break below 7080 would drag Nifty lower to 6870-6640 and finally to 6400. After which Rally may resume in case of New Bull Market. In case of the New Bull correction should not go below 6360. Breach of these levels would invalidate the assumption of New Bull Market.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
Lets look at development on NIFTY & USD-INR Charts.
NIFTY
Nifty tested 6870 and closed near 6780 giving a Shooting Star Formation on Weekly Chart. With Multiple Negative Divergence on RSI on Daily Chart. Which could be the sing of short term Trend Reversal.
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| NIFTY |
As mentioned in my previous post currently there are two alternatives open.
1) The rise from 5933 looks Impulsive and could be part of 3rd wave if we consider the move from 5118-6415 as Leading Diagonal. That means Nifty completed the correction in contracting triangle after 6 years consolidation and we are starting a New Bull Market which could take Nifty to uncharted territory.
2) Another alternative of this rise being a part of the corrective wave from 4531 over last 3 years as I have been always mentioning in all my previous posts.
Currently Index is overbought and some correction looks on cards. Faster retracement below 6650 would drag nifty lower to 6570-6470. After which Rally may resume in case of New Bull Market. In case of an Impulse the correction should not go below 6415-6355. Breach of these levels would invalidate the assumption of an Impulse and New Bull Market.
USD-INR
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| USD-INR |
USD-INR is in a Long Term Up Trend. USD-INR has weekly Channel support near 59-60 which is unlikely to break. Currently it seem to have completed correction in Wave (iv). With US Dollar Index turning up Rupee is expected to weaken taking USD-INR Higher in (V)th Wave Up. Breakout above 63 would be indication of start of (v)th Wave. Wave (v) would take USD-INR towards 74-75 in next few months or perhaps in case of extension much Higher to 90 in a year ahead.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
While everyone is eying on the FOMC Meet on Wed 18 Mar 2014. Lets look at development on Charts. Nifty tested 6575 and closed near 6515 giving a Shooting Star Formation with Negative Divergence on RSI. Which could be the sing of short term Trend Reversal.
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| NIFTY |
As mentioned in my previous post currently there are two alternatives open.
1) The rise from 5933 looks Impulsive and could be part of 3rd wave if
we consider the move from 5118-6415 as Leading Diagonal. That means
Nifty completed the contracting triangle after 6 years consolidation and
we are starting a New Bull Market which could take Nifty to uncharted
territory. In case of Wave Equality the 3rd wave might take Nifty
towards 7300. However, we need a confirmation by break above the weekly
channel resistance near 6650.
2) Another alternative of this rise being a part of the corrective wave
from 4531 over last 2 years as I have been always mentioning in all my
previous posts. In this case Nifty shall respect the weekly channel
resistance near 6650 and start declining towards the lower end of
channel near 5700. And below 5700 downside is wide open.
Currently Index is overbought and some correction looks on cards. Once below 6490 pullback to 6430-6360 might be on cards. After which Rally may resume in case of New Bull Market. However, fast fall below 6212 will invite a huge downside to 5700 and much lower.
As mentioned in previous post Pharma & IT stocks have already started correcting. In case of downside in Index Auto, Pharma & IT stocks are expected to crack heavily along with Capital Goods and Banking stocks.
As per the study of wave personality and guidelines I still doubt the
start of New Bull. Also Triangles are typically found in 4th wave of an
Impulse and wave 2 are often zigzag or combinations. However, one
should not be biased in order to take right trades. So I would suggest
to go with the flow.
Thanks and Regards,
Harsh Dixit.
Hi Friends,
In my previous post I mentioned that break below 5930 would be indication of a downside. However, Nifty didn't break 5930 and gave a Fast & Furious Rally to 6537. But is this Rally a Bulls Rally or a Fools Rally? We will need to have a re-look on short term and long term counts of Nifty.
The rise from 5985 looks Impulsive and could be part of 3rd wave if we consider the move from 5118-6415 as Leading Diagonal. That means Nifty completed the contracting triangle after 6 years consolidation and we are starting a New Bull Market which could take Nifty to uncharted territory. In case of wave Equality the 3rd wave might take Nifty towards 7300. However, we need a confirmation by break above the weekly channel resistance near 6600.
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| NIFTY Weekly |
Another alternative of this rise being a part of the corrective wave from 4531 over last 2 years as I have been always mentioning in all my previous posts. In this case Nifty shall respect the weekly channel resistance near 6600 and start declining towards the lower end of channel near 5700. As the week starting from 10th March 2014 stands at important weekly cycle from the low of 4531.
Lets have a look at what happened in previous week. After testing low of 6212 on Monday Nifty rose sharply towards 6537 which looks to be the 5th wave extension within current wave from 5985 which still might be running. On Friday Nifty marked all Time High and gained 125 points which looks more of a Euphoric Rise. As on a day of Index touching Life Highs the 125 points Rally was driven by few selective stocks which gained 5% to 8%. However, the outperforming sectors like I.T. and Pharma were down 3%. Mid and Small Caps closed in Red which might be due to profit booking. VIX shot up crazily after testing multiple support zone.
Currently there is too much noise in Market and the Rally is Driven by Hope of possible Government change post 2014 Elections. Considering the noise and Bulls Hopium and the increased Volatility in Market the Rally may not be the case of strong Bull Trend. But we never know what the case may be. For short term the index is overbought and some correction is expected towards 6400 post which Rally may continue. However, weather this is the start of New Bull or just a Fools Rally will be decided in Next two weeks.
In case of New Bulls Nifty shall break the weekly channel resistance and head towards 7200.. However, a break below 0-2 line near 6200 would be indication of weakness. In that case we may look for downside to 5700..
If Nifty breaks the weekly channel resistance one should look for stock specific trades which could fetch 20-30% rise in short term. In case of downside Auto, I.T. & Pharma might crack heavily along with Capital Goods and Banking stocks.
As per the study of wave personality and guidelines I still doubt the start of New Bull. Also Triangles are typically found in 4th wave of an Impulse and wave 2 are often zigzag or combinations. However, one should not be biased in order to take right trades. So I would suggest to go with the flow.
Thanks and Regards,
Harsh Dixit.
Hi Friends,
As mentioned in my previous post break below 6190 has confirmed the start of Downtrend and also concluded Truncation at 6356. Nifty made an Orthodox Top at 6415 in Dec 2013. But I would like to conclude the Typical Jan (2014) Top at 6356 in 'Z' wave which started at 5118 in Aug 2013.
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| NIFTY |
When the final wave in a sequence truncates it signifies Bull exhaustion and the drop post such truncation is fast & furious. Nifty indeed created weekly Gap Down below 6190 and dropped almost 420 points in just7/8 trading session which might be wave 1/w/a. Post this Drop Nifty retraced only 38.2% of the fall in 7 trading session which indicates weakness or Bear power. This pullback to 6106 might be marked as wave 2/x/b.
Today Nifty again broke the Bear Flag and indicated resumption of Downtrend. Break below 5930 will further confirm the down side. As per wave equality Nifty might drop to 5683 in wave 3/y/c in next 7/8 trading sessions (i.e. till 21st Feb). In case of wave extension Nifty might test 5569 which is also weekly Channel support.
I would like to maintain my Long Term Bearish stance on Nifty and break below weekly Channel will confirm the downside to 5100-4900 in next 2 months. 2014 might be the Final year of Bear and would take Index down to 4400-3600 in next 10-12 months.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
Lets look at the Global Markets which are Ready for a Long Term Trend Change.
DJIA
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| DJIA |
As mentioned in my previous post DJIA seems to be
in Expanding Pattern. The Rally from 2009 Lows looks a Corrective Rally
and not a Directional move or Impulse.
With Bearish Engulfing monthly close on DJIA the Rally in Intermediate Degree (Y) finally seem to have over near 16600. Break below 15500 indicating medium term trend
change. And break below 13900 will invite a huge downside back to 2009
Lows near 6000.
DAX
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| DAX |
As mentioned in my previous post 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
seem to have completed Z near 9800. Close below
8800 will be Indication of a next leg downward in Cycle Degree 'E' Wave
which could take the Index towards 5000.
FTSE 100
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| FTSE100 |
As mentioned in my previous post FTSE 100 seems to be in huge sideways pattern since 2000. Currently it seem to have completed Cycle Degree Wave 'D' With Intermediate Degree (Y) near 6870.
Close below 6400 will be confirmation of a next leg downward in Cycle
Degree 'E' Wave which could take the Index towards 3800.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
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| NIFTY |
In my previous post I mentioned that the fall from 6415-6130 seems to be 1st leg of the Down Trend. However, Bulls protected 6130 and Nifty bounced back to 6356. This move has taken more time than expected. Generally Diagonals are retraced in 1/3rd or 1/2 time. Hence, the rise from 5118-6415 may not be a Diagonal but a Zigzag. Where C leg from 5700 is forming an Ending Diagonal. And Nifty seems to be in 'e' of C.
Currently it's not clear whether 'e' truncated at 6356 or still running. Until Nifty holds 6190 there is a possibility of one more high towards 6486 in 'e' of C of the Final (Z) leg from 5118. Break below 6190 may be indication of 'e' truncation and start of the Down Trend. And break below 6139 would further confirm the downside. Once the Down Trend is confirmed I'm looking for target of 5700-5100 and lower in next 3-4 months.
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| NIFTY - LONG TERM |
Since the structure of Diagonal is almost invalid now, the alternate Bullish structure is also getting invalid. Hence, I would stick to my Long Term Bearish Views. Nifty is in a Sideways Bear Market since 2008. And it is likely to continue the Bear Run till Early 2015. According to it's Long Term Cycle Nifty may drop as low as 3600 in a year ahead.
Thanks & Regards,
Harsh Dixit.
