Nifty-Count

 

 

Nifty made a spectacular comeback after touching previous lows of Feb 2011 and broke through EMA shorterm  resistances and closed @ 5470.
Markets looked very weak in the previous week and was jolted with Mauritius treaty earlier this week.The has been huge foreign investment into India and approximately 35-40% of the foreign investment is from Mauritius,because of the beneficial tax provisions.Hence,the amendment to the current treaty reduces flows to India due to double taxation for the FII`s and market is absolutely right in reacting to the news in an appropriate way.
Technically,as mentioned in the last post,we do need to change the count accordingly mentioned in the chart.
Assuming wave 2 took a flat correction,with A@5177,B@5944 and C@5195 we are confident that wave 2 is completed with flat and  wave3 in process,until it breaks the lows of 5170-5190 range in near future.

Nifty For June 2nd week

In Continuation to last week patterns chart and as expected,the right shoulder is formed and we are in downmove after touching 5605 in Nifty which is right shoulder.
The important support for nifty comes at 5460-5480 range,failing to hold this range will lead nifty to 5320-5340,which is neckline support.
However,if Nifty manages to rebound from 5460-5480,ideally it will give a shot at 5800.

Global markets and cues:
Most of the Asian markets are in downtrend and DOW at a very important support level.
The economic reports are not favouring markets,either China`s slowdown,rise in interest rates in Russia and below average data from US.
Coming to domestic markets,its all negative.2G scam,expected interest rate hike and low GDP for the concluded qtr and not so interesting results from Ind Inc companies.

Indian markets fared well after low GDP numbers,expecting RBI would hike maximum 25basis points and not sacrifice much of the growth for inflation,low inflation numbers and clear monsoons with 12-14 percent above normal are favouring bulls.

Will see, how markets shape for next couple of weeks and adjust the strategy accordingly at this important juncture.

Nifty-Elliotwave count

Nifty has completed the intermediary wave 2, marked in green @5177 and since then we are in Int Wave3.Third wave is always powerful and fast which creates maximum damage for the traders on the other side.
The potential targets with 1:1 ratio would be 6729 and 1:1.618 would take Nifty to 7688 in the coming weeks and months.

Happy trading

Nifty Pattern

Nifty has been rangebound for quite sometime and it is poised for a breakout from the range,sooner than later.
There have been 3 head and shoulder patterns pointed out in the chart.
1) The one pattern marked in Light green was poised for a breakdown last week touching low of 5328 and bounced 150 points from the neckline.Break and close below 5300 would lead to targets close to 4200.
Keep an eye on this for another week,after which pattern might be negated.

2)  The one pattern marked in purple,is a smaller pattern.This pattern is a bottoming Inverse head and shoulders pattern formed after nifty touched its peaks in December 2010,which should eventually break upside  at around 5800,with the potential target around 6700.

3) The one pattern marked in blue is a much smaller one,which is in the process of forming the right shoulder.

Ideally,I would see the breakout in Nifty to the upside than breakdown.

Nifty for short term

Nifty:
Nifty was in consolidation mode last week.This being an expiry week,it should move on. Let us see the short term chart below.

The 2 best performing markets in Asia,China and India are in a clear downtrend.Nifty has been clearly down trending with corrections around 10-12 percent as of now.To what extent the correction can happen in Nifty?

The answer is:
Nifty as per the pattern above with 1:1 ratio the target would be somewhere between 5500-5550 and with 1:1.27 target would be 5400-5460.
Though the results are good,the sentiment is weak with worries related to scams,inflation and inability of government and RBI alone to control inflation.Any, one not so good news will pull the market to the above mentioned levels.
However,there is also a probability of Nifty touching 5950-6000.Now the question is which is first,going low or up?It all depends on other factors like FII`s,inflation for next 2 weeks,results and RBI policy on 25th.

The best bull case would be to consolidate above 200DMA and first to cross 5750 and then 5855-5875 convincingly,else bears will kill this market up to 5100 levels and further.
With positive results last week for Reliance and SBI,the 3 consecutive close of Nifty above 5755 would take Nifty to 6000 levels.


Best of your trading!!

Update on Reliance

Reliance Industries:
Reliance has been trading in the range between 900-1150 for the past 2 years,which has been the main laggard of Nifty. This time around with good Q3 results,will the stock move up?
Lets see what chart says for short term:

 A perfect hammer at the end of downtrend on Thursday last week with huge volumes indicate trend reversal.Is this the short term bottom?May be,i more leg down to 950 levels and then towards 1040.Oscillators are still in negative territory.
Bottom line,it is still in trading range.Buy at 950 levels and sell at 1120 levels.If we see clear breakout from this range,it would be 200 points from breakout either side.Better avoid this stock.