Thursday, December 6, 2012

Nifty near 5950!!! Long term forecast!

Nifty today touched 5943 levels during closing hours. We have been talking about 5950 levels when it was at 5550 and have been very accurate in forecasting this up move.

The following article is taken from "Financial Waves Short term update" published on 3rd December research report which is published on daily basis by me. For more information on subscribing visit or write on

Nifty Long Term Wave counts

Long to Medium Term analysis:

We are showing Nifty weekly chart that shows the long term wave counts of Indian equity markets. As we have mentioned before, since the start of 2008 prices have been moving in complex corrective pattern. The entire wave down from the top of 6357 to 2253 has formed the first leg [W] of this complex pattern. The move up since then from 2253 to the high of 6339 is wave [X]. We were expecting this entire rally as impulsive before but looking at the time taken for this up leg to retrace the complete of down move of 2008 makes this leg as wave [X] more probable. Prices are currently in primary wave [Y] of complex correction and has so far completed only intermediate wave (a) on downside. The up leg (b) (shown in detail on daily chart) is forming a flat corrective pattern on upside. In this intermediate wave (b) prices have so far completed minor degree wave a and b and is now in wave c.

In minor wave c prices have completed wave 4 at the low of 5548 and is now moving up in wave 5. As we have mentioned before 5920 to 5950 levels form an important level since there are cluster of resistances at that level as shown in above chart. However, wave 1 and wave 3 has taken approximately 5 weeks and so wave 5 should take atleast 2 to 3 weeks to match the degree. Nifty is already near 5880 and there is still much time left for wave 5 to complete. This increases the odds that wave 5 can be extended and move towards 6500 levels. Also current weekly bar shows one of the steepest advance and there is no loss of momentum as of now. As we have mentioned before important resistance levels should be taken out with gaps and to clear 5920 to 5980 resistance zone Gapping action will be required.

However it is now imperative to see how prices are reacting from these levels before raising our targets. We are closely monitoring the pulse of Indian equity markets!
Nifty Daily chart:

Nifty 120 mins chart:

Wave Analysis:

We mentioned in previous update, “Current expiry had been different than the previous past few months, as expiry days had been quiet with relatively narrow range bound movement. For existing long positions follow trailing stop method. 5710 on downside is ideal place for placing a sell stop order for long positions.”

Nifty continued to move up for 3 consecutive days with no loss of momentum seen yet. As we have mentioned in our weekly outlook prices are now heading towards the resistance zone of 5920 – 5970 levels. It will be important to observe how prices will react from here.

For confirmation of wave 5 to complete we will require that the low of 5650 should be taken out in less than 3 days which looks highly unlikely and so there is much potential left for this up leg to continue.

The Advance decline ratio and high beta sectors continue to be healthy as of now. First sign of weakness should be seen in these sectors when a major top is being formed unless it is in the form of euphoria!

Our readers who are following trailing stop method please trail your stops for long positions towards 5780 levels.

In short, our bias continues to be firmly positive on Nifty with immediate resistance near 5950 levels.

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