Friday, June 13, 2014

NSE Midcap Impulsive possibility as per Elliott wave

The below research is picked up from "The Financial Waves short term update" published on 12th June morning before markets opened. 

NSE Midcap index has strongly outperformed over past few months. Following chart clearly shows the up move.

NSE Midcap Index Weekly chart:

NSE Midcap Index Daily chart:
Waves Analysis:

NSE Midcap has shown strong performance since the start of September 2013 and has continued the same till now. In the period from the 2008 to mid 2013, this was one of the sectors which was underperforming. But from September 2013 there is change in performance cycle and more buying interest has been seen is riskier assets. In this environment it becomes important to know what is the long term trend as per Elliott wave theory for Midcap index.

As shown in Weekly chart, same as Bank Nifty, from the start of 2008 prices were moving in the triangle pattern in from of [A]-[B]-[C]-[D]-[E]. In this intermediate wave [E] completed at 6330. The rally which started in the month of September 2013 is clearly impulsive in nature and it has also taken out the high of 2008. This increases the probability that next major bull trend has started in this index.

As shown in Daily chart, intermediate wave 2 completed at 7440 and since then prices are moving in form of intermediate wave 3. Internal structure of the same suggests that minor wave v is ongoing Now on downside 10500 will act as an important support.

In short, short to medium term trend remains up for Midcap Index. Any move above 11120 will take prices towards 11500 where minor wave v = wave i.

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