Wednesday, March 13, 2013

Nifty continues to move as per path ahead!

By Waves Strategy Advisors. To subscribe to daily research on Indian equity markets visit or write to
Five reasons why we were bearish on Indian Equity markets when Nifty was trading in the zone of 6050 – 6100 in January 2013!
As per advanced Elliott wave concept, no part of wave 3 should break the 0-2 line or else wave 3 should be considered over or wave 2 will be still ongoing. Now as shown on 60 mins chart, chances of wave ii is still ongoing in form of running correction is extremely less as wave ii has already consumed time more than 3 times wave i. So this leaves with only scenario that wave iii is over and wave iv is ongoing.
RSI has now confirmed negative divergence as shown on daily chart. All important tops or bottoms mostly form with negative divergences. Also as wave iii is showing strong negative divergence, chances are high that an Ending diagonal in 5th wave is being formed and one minor push on upside will give triple divergence on RSI.
69 days Time cycles that we use to predict probable bottoms and tops (shown on Sensex before) confirms with wave counts that prices are due for a top.
Prices have so far retraced around 78.6% of down move from top of November 2010 near 6300 to the bottom at 4550 levels. We have seen before that this retracement level has proved extremely important for Indian markets.
We were aware about the few of technical reasons even before but what has changed since 1 day before is the break of 0-2 line on closing basis which happened yesterday. This rules out the probability of wave iii of 5 of C being an extended wave and keeps only 1 highly likely scenario of Ending diagonal being the most probable scenarios.
As we have mentioned before past 100 points of rally on Nifty has been sufficient for turning the sentiments extremely bullish with targets of 7000+ forecast by many brokerage houses and analysts. The final minor vth leg on upside will be sufficient to turn even more people on extremely bullish side over next 1 to 2 weeks. We will see this as negative sign.
Currently one minor leg up in form of wave vth is forming which can go towards 6050 i.e. 61.8% of wave iii or maximum 6100!
Nifty Daily chart:
Anticipated on 11th January 2013: 
Wave analysis:
We have been precise in capturing the top for the Indian Equity market. Prices have formed top at 6111 on 29th January 2013, thereafter it has breached the wedge pattern (Ending diagonal pattern) on downside and moved lower till 5663. 5650 is the support level which was shown on11th January 2013 report and recently prices reversed exactly from near the support level of 5663 and moved higher.
In the previous report we have mentioned strong resistance of 5970 level and prices have made high of 5971 and at present consolidating below the resistance level.
Combination of simple technical analysis, momentum indicators, Eliiott wave theory and Time Cycle helped us to predict the short to medium term movement objectively.
Do not get carried away in euphoria or news as they are the reaction after market movement. To know the next big trend of Nifty subscribe to our daily equity report (The Financial Waves short term update). For more information visit or write us at or call us on +91 22 28831358 / +91 9920422202.

1 comment:

  1. Sir - Kindly Post Elliot waves for Tata Global beverages..