08th sep 2007 update on my elliot wave count

so as per my expectation the subwave iii-(i) most possibly terminated at 4547.75 and iii-(ii) has opened down. this can go down upto 4339.35 or 4210.60 after which upward wave iii-(iii) will open up targeting atleast 4884.90(max 5222.05) or 4756.15(max 5093) depending upon the degree of correction of of iii-(ii).

so it is advised to buy attractive stocks on declines in the current downmove.

at present iam ruling out 4000 or even 4100 following the given wave structure, as need arises the stucture will have to be changed for changed scenario as of now it is kept intact by me.

calls for yday zooming, no sl were hit

litl futures(given buy above 299) today closed 305.85 remain long with tsl of 298 t1 311 t2 316
rel futures(given buy above 830) today closed 865.50 remain long with tsl of 853 t1 870 t2 881
shipping corp(given buy above 196) futures closed 203.70 remain long with tsl 195 t1 209 t2 213

litl high was 309.95 so returns are Rs.9307, closing basis returns Rs. 5822.
rel high was 869.90 so returns are 21945, closing basis returns Rs. 19525.
shipping corp high was 207.70 so returns are Rs18200, closing basis returns Rs.12320.

all these in just 2 days of trading.
there were atleast 1-2 opportunities during the day to buy at the recommended price on 5th sep 2007.

all calls rocking.

my elliot wave count

updated upto the 6th of sep 2007

the 3rd major of the 5th primary wave is on.

counts:
primary cycle:
wave I: 920-2014.65
wave II: 2014.65-1292,20
wave II:1292.20-3774.15
wave IV:3774.15-2595.65
wave V:2595.65-???

inside primary wave V:
major cycle:
wave 1:2595.65-4245.30
wave 2:4245.30-3554.50
wave 3:3554.50-???

inside major cycle 3:
wave i:3554.50-4647.95
wave ii:4647.95-4002.20
wave iii:4002.20-???

do not remain short in the mkt as we are in the major 3rd (impulse) wave of primary 5th wave. The target for primary 5th wave i had calculated and posted on http://www.moneycontrol.com/ one year ago, the primary 5th wave should have terminated either at 4367 or near 5461. The target for major cycle 3 is coming to atleast 5200.

mkt had earlier reacted and come down after touching near 4367, just 4 points short.

the tgt for the upmove of the major wave 3-i, i have been posting on vfmdirect messageboard, which i had calculated at 4672. As u can see the 3-i wave actually terminated nearby at 4647.95 just 22 points short.

currently i think most probably we are near to complete V-5-3-iii-(i) and V-5-3-iii-(ii) will open down, confirmation awaited (see chart).

confirmation of wave iii (and also sub-wave iii-(iii)) is crossing the top of 4647.95.

Hence, any dips in wave 3 will be a buying opportunity.

major wave 3-ii termination point is also given in my nifty weekly chart at 4000 exactly on the supporting blue trendline.

5th sep 2007

today i predicted nifty high(4502-03), low(near 4465) and close(4480(+-3)) perfectly on http://www.vfmdirect.com/ shoutbox as many times earlier too.

mkt is likely to consolidate further in coming days, 4400 is imp and should be held but if broken i see the support coming up at 4325.

futures trading lvls for 5th sep 2007
lanco infratech buy above 299 for t1 303 t2 308 s1 297 sl 290
reliance energy buy above 830 for t1 852 t2 861 sl 815
shipping corp buy above 196 for t1 203 t2 210 sl 186.

nifty negative divergences

sign of a big correction in the making?

negative divergence seen in nifty weekly charts both on macd and rsi indicators since april 2006.

negative divergence seen only on rsi on nifty monthly charts since may 2006.

nifty weekly technicals

just have a look at the nifty weekly chart. red and pink lines are resistance lines and green and blue lines are acting as support lines. it is very clear that earlier, the shorting opportunities were available on break on downside from these lines and shorts covered on the strong blue support line at bottom(approx 4000) and nifty bounced on short covering and some buying there. now it is above the green line(approx 4230) and upmove is now resisted by the pink resistance line which comes in the region of 4525-4534 in the coming week. If the pink line is also taken off then the red line provides resistance above 4600. chartically, the support can be provided at/near 4300(not shown) and also by the green line. a nice short strangle strategy can be worked out here.

right now three levels are important 4209(100 dma), 4100(previous low and 50% ret of rise from 3554 to 4647) and 4065(200 dma).

if this is also broken then two levels to look out for are 4010 and 3972.

Lastly, the log scale multi year nifty trend line support is near 3860(which is also 38.2% ret of total rise from 2595.65 to 4647) for the august month. It should be noted that in march the nifty had bottomed out at 200 dma which was very near to 38.2% ret of the rise from 2595.65 to 4245.

if a pullback occurs, then chartical levels on upside are 4215,4245,4300,4330,4365 and 4376(13 dma).

4354 is the 38.2% ret of the total fall from 4647 to 4171.

the nifty closing above 4376 is good for upmove, a closing above 4465 for a couple of days might resume the fresh bull run.

the technique used to determine bottom formation discussed yday was expected to complete and has 2-3 days of std deviation. But looks like US mkts are still falling and can have major impact on the downside going tomorrow. Here 4100 and 200 dma are vital supports, we are already trading below 100 dma. The target for Wolfe wave(discussed here earlier) and 200 dma are quite similar now and nifty can reach there in a single days fall. The subprime and its after effects alongwith yen unwinding is pulling liquidity from emerging markets.

a technique i used gave correct top and mkt started falling thereafter. And according to the same technique, the correction might well be over now. how true or false only time will tell.

multi year bull run support

short the following futures for today only

bharti below 862 sl 868 tgt 853
icicibank below 885 sl 890 tgt 875
nifty below 4353 sl 4366 tgt 4310/4256
tatasteel below 639 sl 644 tgt 630/617
unitech below 522 sl 526 tgt 517/509.
sbin below 1646 sl 1656 tgt 1623

arthikalyanji, i have given answer to ur queries, pls check ydays comments section.

10th aug 2007

so my apprehension as given on 08th august posting below came true "subprime worries to continue, if this was the primary reason for mkts correction, then it would resume again after few days." and today high flying indian mkts came down due to bnp paribas europe hedge funds going bust news.

technically the reaction at 4530 was just near 161.8% ret level of recent fall and recent resistances and regarding wave todays high was about 70% of the total fall(in last years fall, the wave had retraced 70% and then continued downwards), todays close is just above support level of 4401.55 but since the bad news on sub-prime is continuing, we can expect 4367 followed by 4355 and 4340, any fall below 4323 it can test the previous low of 4267.

the rise was lacking conviction and was on short covering, the fall is on much higher volumes and shorts are back, so the outlook remains bearish going forward.

kalyanji, iam sorry as these were just ideas for today intraday and hope most of them performed well before mkt came down. i wanted to give levels for futures but since yesterday night there was bsnl net problem which got resolved just now. currently not giving any cash calls as mkt is in downtrend, will give positional ones when clear uptrend begins. thanks also panditji for ur appreciation.

09th august 2007

4472-4505 area is important going forward for following reasons.

1)13dma,15dma,20dma lie in band 4471-4487
2)there are 61.8% retracements of 4647.95-4267.15 and 4624.30-4267.15
3)some previous resistances are in this range and the previous supporting trendline (now a resistance line) passes through this region.

in futures,
airdeccan,educomp,idfc,itc,ivrcl,cumminsind look good for short term buy.