Tuesday, July 24, 2012

Nifty path ahead...

Bottom Line: Nifty failed to take support near 5150 levels and moved down towards 5100.

Nifty Daily chart: 

Nifty 60 mins chart:
Scenario :

Nifty 20 mins chart:

Wave Analysis:

Nifty failed to find support near the 5150 levels. This increases the possibility that the scenario 2 we showed before is a higher probability scenario.

Nifty had a gap down opening of more than 40 points and prices did not make any attempt to close this gap. Also the advance decline ratio was strongly in favor of bears. However, Midcap and Smallcap index did not see strong overall selloff and these indices corrected by around 1.2% to 1.3% when the major index corrected by more than 1.5%.

Nifty daily chart, shows the path we expect markets to follow over next few weeks. Prices can move in sideways action for a few days between 5100 – 5170 levels. We can then expect a bounce back till 5250 – 5260 levels and after that prices can again retest 5100 – 5050 levels. Daily chart shows this path. However failure of prices to find support near 5050 to 5000 zone will be strongly bearish and will challenge the current wave structure we are showing.

As shown in Nifty 20 mins chart, prices are now near the lower end of the channel support. From here there can be attempt to move in sideways action for a while and test of upper end of the channel near 5140 – 5150 levels. A break above this channel will open up move towards 5170 – 5180 levels.

In short, we expect the downfall of yesterday should get arrested around 5100 levels. A close below this level will take prices towards 5000 – 5050. On upside 5170 should act as resistance over short term. Prices can move between 5250 – 5050 over next few weeks.

1 comment:

  1. From first the wave count does not fit in the market movement....