nifty technical view...

as u must be aware with my analysis on this blog, on the daily chart i was viewing correction after 6357 as zigzag(3 waves) then connecting x-wave upward(chart given earlier as roadmap for nifty, 3 waves) and then probably a flat. so any Vth monthly upmove has to correspond with daily waves upmoves. it was also said in that chart of mine that x can move max upto 5630 only, any movements above 5630 to be considered as bigger wave B(after first abc zigzag) of a larger flat wave.

on the monthly chart nifty spot slipped marginally on close last month below its long term support trendline. but scenario this month looks very bad since it is continuosly trading below both the 0-I and II-IV trendlines. the big resistance offered by II-IV trendline is around 5000 for this month, 5000 is also imp as it is 50% retracement of 3554-6357 and 38.2% retracement of 2595-6357.

long time back i had given wave counts on my monthly elliott wave chart and current correction was shown as ivth wave progressing in triangular fashion after which terminal impulse Vth monthly may begin. current downmove on nifty seems to be last wave of that triangle trendline which stands near 4500 for this month. as such any closings below 4448(jan low) is not acceptable for a probable monthly Vth upmove to begin. any closing below 4445-4448 will be very bearish and will point to 4280 and 4002.

if multi year bull run starting 920 on monthly charts is assumed to be over at 6357 then 4280(38.2% ret), 3638(50% ret) and 2995(61.8% ret) are the imp lvls on the downside. long time back i had mentioned that is is essential that 4245 should not be broken during downmove after january so that terminal impulse Vth monthly cannot be a failure, so far it was protected and had opened the opportunity for non failure of the Vth monthly.

recently nifty could not close above 5280 and on last friday saw addition of huge options call writing at strike lvl of 4700 when it traded below 4625, now what is very interesting here is both the lvls 5280 and 4625 are respectively 38.2% and 61.8% retracements of my montly V-iii. therefore closings below 4625 is also very bad.

because of the rangebound nature of the market after the big crash since jan 2008 its been a terrible time for both the investors(who may have lost a fortune) as well as traders. too much volatilty in narrow range is not good for even short term traders/investors. after bad financial news(subprime etc losses abroad) currently high inflation rate is a big drag on economies worldwide is playing on the minds of big funds as well as investors keeping mkt at lower levels on fears.

but all things are cyclical in nature as well as mkt, one day it has to end somewhere, till then it will go on its natural course.

-abhay r somkuwar.

further update on my ew...

earlier i had pointed out downmove upto 4775-4800 and a lower lvl also acceptable before fresh upmove begins. the lvl i was looking for was 4546-4551 from where this upmove might begin based on terminal wave counts magnitude limit. any fall on closing basis below this(90% ret) will call for a change in this view else its valid.

if today and tomorrow ns maintains closings at or above 4650 then one can take/carry a short term long position with appropriate sl.

ew target nears...

so as given since a long time about nifty moving up to 5100-5175 then a fall to 4800 -4900 is coming true afterall, this is yet again just one of the many success stories of my ew analysis which i have been providing for free since this blog was started.

a happy moment for me and a happy trading time to all readers and followers of this blog.

nifty view...

i always post my views with charts to let people understand what happened technically and what may happen, this is for those who don't believe TA/charts works at all in mkt.

so coming to the point, see how nifty again took support on the blue trendline today. this situation alongwith positive div intraday on indicators makes it a candidate for bounce which can last upto 5088-5114(falling dotted blue resis line) if global mkts are supportive. closing above that it will be bullish.

on the other hand if slides below todays low nifty can lose 50 points more below that.

ew update:

so as given earlier 5175 proved too much for nifty and it led to profit booking as expected(see previous posts). of course since long time all the downmove from 5298 i was viewing as a three leg correction, acc to that view of mine currently we are in third leg a tentative tgt could be about 4785-4900 if blue channel line gets broken in coming days. lets see.

united phosphorus...

united phosphorus price above all moving averages and neckline and now taking support on trendline, looks good if mkt stays up.

nymex light crude...

here's my nymex active crude oil fut contract chart(weekly), moving near upper end of channel, upper end of channel $130/bbl plus, vol still high and price still moving strongly, stochs/rsi in overbought zone, support seen near $120.50/118/116/bbl, adx showing gradual weakening strength of trend.

new features...

some new features added to blog:

1)positional stock ideas in fno link(on page top).
2)vfmdirect ta friend's blog list(right hand bottom)
3)vfmdirect.com site feed showing updated threads(right hand bottom).

i was expecting nifty to take support at 4920(50 dma)/4914(4914 lies exactly on tline connecting recent lows). i think yday was a bounce which may continue till 5100-5175 then a further fall upto 4800, then a fresh upmove begins thereafter, some months back i was viewing terminal impulse development on 5th monthly(ew) and currently this view of mine is also based on that, if it goes this way then that thinking will be ratified to some extent.

nifty view...

update on my ew...

note: in the post 'general roadmap for nifty' below i had given x wave on daily chart. it is to be noted that the connecting x wave (after the c of first zigzag abc completion after the 5th impulse) cannot go beyond 5630 and may be even less than 5630.

if this happens to cross 5630 then its not an x wave and can become a larger B of a probable larger flat/sideways pattern (whose first leg is a zig zag, after the 5th impulse) .

now nifty is above 50 dma and also above the sloping channel but it must close above two imp resistances of 4970 and 5020 for upmove upto 5140.

on monday it is likely to open gap up and there are chances of nifty closing above 5020.

general roadmap for nifty...

daily C is still running from near 5368 down, exact magnitude not known but it may be shorter than daily time frame A, after daily C ends monthly 5 up will start, if C ends higher than 4245 then monthly 5 can even exceed 6357 else it will fail, i suspect monthly 5 can take form as a terminal impulse.

latest update on my ew...

my monthly ew chart with counts, in this i have assumed correction for V-iii at 6357, V-iv to be over at 4448, tgt for V-v comes roughly at 6100, (V-v-(i) internally on daily time frame assumed to be triangle), possibly we have a terminal v impulse, might turn out to be a vth failure.

nifty fundamental valuations...

the fundamentally life time high valuations were cautioned since many months.


on 8th jan, after touching the peak p/e mkts did make a big crash.

anything above max p/e would have been a bubble i.e euphoric run. technically mkt should spend lot of time at lower side(consolidate) without breaking the low.

any possible upmove now above 6357 can be justfied in next financial year after couple of months, after factoring in next year earnings.

lets have a look at min(13 p/e) and max(28.50 p/e) valuations(historic).

fy07-08:

eps=225

nifty (min): 225*13(times)=2925.

nifty(max): 225*28.50(times)=6412.50.

fy08-09:

expected averaged earnings growth of nifty50 stocks=15%

projected eps=225*(1+15/100)=258.

nifty(min):258*13(times)=3354.

nifty(max):258*28.50(times)=7353.

these figures of nifty(min) and nifty(max) also agree strikingly with technical tgts in case of bear and bull mkts.

by abhay r somkuwar.