Nifty's Major "B" up foxed all..!!

The Major "B" up which I have labeled since that July low at 3790 may still be playing out and the "b" down of this "B" up foxed me too.This is precisely what was mentioned at that point that it will make you change your views so frequently.In such a scenario, we have started the "c" up of this "B" up.Even a technical analyst will tell you that what the market just did was a classic text book Double bottom at 3800 and has laid the foundation for the next leg up.The direction is up, no doubt in that.(Remind you here,the July rally from 3790 to 4534 marched up without much correction)So let us remember the same. So Go ahead, make your shopping and hold your holdings ...(Volumes were quite heavy in the last two days of reversal)

Alternate view:-Major "A" Down(ABC-X-ABC) ended on Thursday at 3799 with the " C" failure and we may have just started the major "B" up which can do a retracement of 50% to 61.8% the entire fall from 6357 to 3800.

Robert Beckman in his book "Elliot wave Explained" says..."The most difficult part in following Elliot waves is that in most of the time it is hard to believe in what you see in the waves as it is happening. In hindsight, you can label them accurately but a lot of conviction is required to stick to what you see & believe in"..and I couldn't believe in it inspite of seeing it..



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Wild Moves ahead & A Double Bottom..!!

I have counted the waves from 4638 as follows:
C.1 = 4638 to 4251
C.2 = 4251-4398-4204-4538
C.3 = 4538 -3799
c.4 = 3799 - is on...

Hence, C.4 should be limited below the C.1 bottom at 4251.Breaching 4251 will call for a change in the wave labeling:-
A.Bearish scenario..Option-I will come into play.

B.Bullish Scenario: "ABC-X-ABC" fall completed & Major "B" up opening up.(Though 4538 needs to be taken out, a reversal can be considered on a move above 4325)

Markets have rallied powerfully in downtrends this way earlier too and continued to fall subsequently to complete their downtrends.The inference here is that do not rush in to create "Shorts" immediately but to play out this up move due to its highly oversold status and wait for some weakness to come in the short term oscillators (may be by Monday or Tuesday)as we should remember here that we have been falling since Jan.2008 and are in the last leg of this downmove and the markets have made a double bottom at 3800. Let us respect that.

Nifty completes a five from the 4538 TOP..

Daily price pattern is still in downtrend. However, the oversold short term reflected by the positive divergence has provided this powerful rally. Resistance to this rally will be 4095, 4130 , 4150 (At its idealistic, theoretical best to 4200/ 4225).So expect good amount of volatality from tomorrow with some wild see-saw movements. Do not get carried away by the wild upmoves and remember to write some calls above the 4100 levels(4000 Call-write) and buy some puts (4100 puts - buy).

Mr.Praveen has made some well researched comments in my earlier posts. Read them for your benefit & for its valuable guidance. Be patient with this market to get your desired levels to initiate your trades and haste not in a rush of excitement so as to not to miss all the sizeable opportunities. Write out your own plan of actions and execute them at leisure.


High volatality ahead..

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A possible road map for this "C" down.( The other alternative is that we might end this C.3 by today or tomorrow and go onto a C.4 for till settlement and followed by C.5 for the 1st week of Oct). We will update & review this chart daily.Any suggestions and contributions is most welcome.
OPTION-I:-

OPTION-II:-

NIFTY'S sideways trend to end..

Nifty seems to have done a sideways pause for the last three days and poised for a further fall below 3920. Only a trade above 4040 in the opening hours may provide a rally to 4100 or above. Break of 3960-3950 will lead to a new low..



Technical data table do not indicate any reversal in the daily as yet.There are two possibilities :-

1)Make a new low now and trade sideways for 3 days and then fall for the settlement.

2)Rally now towards 4150 area and then start to fall towards settlement day.

A NIFTY Trade for the settlement.

Here is a trading (Positional) call given by my Critic for this Sept. Settlement:

SELL NIFTY Sept. 4000 Call around 200 to 250 rs upwards in the next two days time.

No anxiety of trading the Naked Nifty futures in this trade.You are actually selling Nifty at 4200 - 4250 when you sell 4000 call at Rs.200 - 250 or more.

He, my critic & friend, expects the Nifty to close below 4000 for the settlement.

Take your own decision after evaluating the merit & demerits of this call.

My addition:- If you are lucky to get this "sell at Rs.200 -250" today, book some profit when it falls to 4000 - 4050 area, and resell the same again and hold till the settlement.

Nifty pauses at 3920 for a rally

Having fallen more than 600 points from 4538 to 3920, Nifty shows some intra recovery in the last two days. A sideways trend or a pullback towards 4200(Break down point)or 4325 (4th wave of this down) may happen in the next one or two days with supports at 4000 and resistance at 4200/ 4300. To meet with resistance at 4200 to 4300 area. Short Term direction is likely to TURN UP today with the break of the down channel.A retracement for the fall from 4538 to 3920 works out to 4150 (38%); 4225 (50%) and 4300 (61.8%).

Nifty's Internal waves

I'm posting a chart of Nifty's hourly movements from 4638 top and it's possible internal wave counts:
4638 - 4204 = C1 = 434 points
4204 - 4538 = C2 = 334 points
4538 - 3911 = C.3.1 = 627 points(whether it is C.3 or part of C.3,we'll know soon)
3911 - .....= C.3.2 = 23.6% will target 4059; 38% target 4149; 50% target 4225.

As the hourly & daily are getting oversold & far away from averages, a sideways move between 3900 to 4100/4200 may be expected.

Any change in the labelling will be done promptly.However, direction is most important.

NIFTY's Likely Targets

Breaking the 4200, confirmed a channel break and the next downtrend which is labelled as "C" wave which has already completed the 1st down(4204) & 2nd up at(4538) and its on its 3rd down which is quite ferocious having likely targets of 3830 & 3662 or even more..If we take the "A" wave to equal the "C" down, then the likely targets could be 3173.

While trading this major "C" wave down, follow the technical table which shows the internal strength & weakness of the Nifty (Week, Day & Hour) placing more weightage to the week followed by daily indicators.

Though "B" Major wave up was in contention till Thursday, the break of 4204 on Friday confirmed this "C" down, necessitating the change in the labeling.

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Nifty's intra bounce

Nifty bounced off an intra day low of 3955 and the oversold Hourly indicates a minor reversal.

NIFTY Down Channel

Friday confirmed the down channel, though last Thursday has given an advance indication. Any move upto 4100 to 4150 is a good sell area. 4638 to 4200 = 438 pts. So the next fall that has started from 4538 can target 3830(1.6182 times 438 pts) or 3662 (2 times 438 pts).After this 3rd down, a rally as 4th wave up & then the last 5th wave down ( The target for the same will be calculated based on the 3rd wave completion)

NIFTY- Trading Range

The More I study the stocks, I am of the view that we are still in the "B" up, targeting the 200 DMA at 4950 (With in which we are trading the "b" of the "B" wave; Only falling beyond a 61.8% retracement of 3790 - 4638 i.e below 4113, should I change my views). Let me, then, wait for few more days to change my views.

Nifty is falling down from 4538 and its internal waves suggests a fall upto 4130 to 4160 in the next one to two days time periods during which it will have resistances in three stages of 4250-4260; 4280-4260; 4300 to 4325.As and when the projected five waves are complete(If its a "ABC" down from 4538, you may not see a 4th & 5th), the daily & hourly will bottom out and a bounce/ rally will materialise. I have been stating often on the importance of channel trading when things are unclear at times and I still feel its importance is not realised by many short term traders who are not able to adjust to the fast changing markets because their time frame is all confused.



Hourly internals likely to become oversold in 5 to 10 hours during which time the market will find a temperory bottom and rally from there. The quality of the rally (Pricewise faster compared to the internals or vice versa)will determine the future direction and its duration.





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