NIFTY - EW ANALYSIS

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.

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.

SELL IN MAY AND GO AWAY

Hi Friends,

As mentioned in my previous post DJIA seems to be in Expanding Pattern. The Rally from 2009 Lows looks to be a Corrective Rally and not a Directional move or Impulse.

DJIA

Ending Diagonal from the Low of Oct 2013 seems to be complete near 16700, which also marks for a Triple Top. Prior to the Diagonal, DJIA corrected in a Triangle; which also indicates that the move from Oct 2013 Low is the Final Move in this sequence.

DJIA

With this Ending Diagonal the second Zigzag from Oct 2011 Low looks complete. And also the Double Zigzag from low of March 2009 looks complete near 16700 with this Ending Diagonal. The Rally from March 2009 Low seems to be Expanded Flat 'B' Wave. Next leg in 'C' of Flat could take DJIA to 15 Year New Low.

DJIA

Though Currently DJIA is at All Time Highs, the Rally looks like a clear Zigzag Corrective Pattern; as against the Traditional concept of New High being in Bull Market. On a Medium Term Time Frame though it can be Termed as Bull Case, on a Longer Time Frame it's just a Sideways Bear Market. Such Patterns have occurred in the Past during the Sideways Bear Market of 1960-80.


Thanks & Regards,

Harsh Dixit.

NIFTY & USD-INR EW ANALYSIS

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.

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

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.