Wednesday, October 17, 2012

Nifty continues to move in wave 4...

Published in “The Financial Waves” by Waves Strategy - on 17th October 2012 morning before markets opened.

Bottom Line: Nifty continues to form alternate days red and blue candles as expected….

Nifty Daily chart:

 Nifty 60 mins chart:

Wave Analysis:

We mentioned in previous update, “In short, the bias on Nifty continues to be sideways to negative. As long as 5750 is protected on upside prices can move towards 5600 levels. For today expect the range bound movement to continue between 5620 – 5720.”

The current leg ongoing in Indian markets might be boring and time consuming. Such action is typical for wave 4 as we have been constantly saying all this while. We mentioned 5720 as important on upside and prices made a high of 5714 and turned down from there.

The channel shown on 60 mins chart remains intact and the high was made on the upper end of that channel. Prices are now approaching near the lower end of this channel and the support of 5620. As long as the lows at 5600 – 5620 is intact prices can continue to move within this narrow band.

The daily chart of Nifty clearly shows alternate days red and blue candles since past 7 trading sessions. If this structure continues Nifty can form a blue candle today which means close above the previous day’s close.

Midcap and Smallcap sectors are also not giving any trending move unlike previous structures when Nifty was consolidating but Midcap & Smallcap continued the uptrend.

In short, there is no change in our outlook and expect such boring sideways action to continue unless Nifty breaks above 5720 or below 5600 for short term trend in that direction. Once this wave 4 is complete wave 5 will start on upside that can take prices towards 5950 where cluster of resistances are present.

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