Friday, April 29, 2011

Time cycles indicate positivity but wait for price confirmation!

Nifty 30 mins:

Sensex Daily:

Nifty broke below the support zone of 5780 level and closed the week at 5750. We are currently neutral and wait for index to start moving atleast above 5810 and then above 5880 for strong positive confirmation. A move below 5700 which acted as a support twice will indicate negativity. As shown on 30 mins chart, the 26 days cycles still remain intact and we would give a leeway of another 2 days and see if this cycle is still valid. Cycles exist and they vanish without giving any prior indication. We rely on them as long as it works.

Sensex chart above shows a bigger time cycle that we mentioned before. We are not even near the middle of this bigger cycle and so we should see a good move up. Shorter Time cycles shown on Nifty combined with bigger Time cycle indicates positivity. We can also see that ROC has been very useful in identifying the uptrend and most of the times when ROC crosses above 0 from below we see some good upward movement. Current ROC level on Sensex chart is -1.5 and we will wait for it to move above +2 level for positivity.

In short, Time cycles & Elliott waves are indicating positivity but the most crucial aspect is price which is not showing strength. We are therefore currently neutral and wait for 5810 – 5880 level to be crossed above in Nifty for positive confirmation. A sustain move below 5700 will increase the odds that the current rally was only wave X!

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