Sunday, February 21, 2010

Sensex - Daryl Guppy view! Synergies Elliott view

Daryl Guppy view

Elliott view
Daryl Guppy Moving average method is very interesting to watch
This method uses a cluster of short term moving averages and cluster of long term moving averages
Whenever all the short term moving averages move above each and every long term moving average one can initiate long position and whenever each and every short term moving average moves below all long term moving averages, a short can be initiated as it indicates reversal in trend
Looking at the Sensex chart above requires little explanation and it is for the first time since March 09 that all short term moving averages have moved down below long term moving averages
Also please note that how Long term moving averages cluster together after which major trend reversals happen
Elliott Perspective
Elliott wave counts shows an impulsive down
This counting does not looks good from aesthetic point of view but it is an acceptable count where wave 3 and wave 5 are exactly equal
It is difficult to say at this point whether we completed wave A down or it is just wave 1 of A. Only time will help us to clarify this
The top on 17th at 16480 is likely completion of wave 2 / B up
In our previous blog we mentioned if prices rally then 16500 should provide excellent opportunity to go short, prices touched 16480 and reversed
This offers very good place to initiate shorts with stop loss of 16481!
Do not be surprised, if we see very steep impulsive move down from here in coming weeks with major supports failing

Wednesday, February 10, 2010

Selloff continues!


Sensex is exhibiting very weak structure
One of the probable counts show 1-2, 1-2 formation. If this count is valid prices shall now move down very fast in next couple of days
The other plausible count is that 5th wave of A is extended
Either which ways the intermediate trend is clearly down and very shallow pullbacks suggest very weak internal structure
As we said in our previous blog, Metals are going to be worse performers - BSEMetal index has moved down substantially since then. If market cracks from here expect drastic move down in this space
If price reverses from here and rallies, 16500 should offer excellent opportunity for shorting!

Friday, February 5, 2010

Ready to fall off the cliff!


As we said, an impulse down has started!
We expect volatility to drastically increase as prices move down
The market structure looks extremely weak with recent corrective wave failing to reach even 38.2% levels
Rally in last 4 days are clinging to the lower boundary of ending diagonal which is acting as a very strong resistance level
First support should now come in at 15400 - 15500 levels
Please be prepared as there is a good chance of prices moving down very fast!