For the last many days, I have stuck onto my decisions even though there was slight error of judgement on the last 200 points in Nifty....I still stick to my decisions and continue holding the same view that we will definitely see the lower levels of 4500 at least, if not 4200.
The question remains when and how?
Well today, I will present a view based on certain peculiar patterns developed in Nifty and who knows.....maybe the game is laid down like that only.....Kindly download the presentation from the link given below.
http://www.4shared.com/file/137262793/adb3ed68/Nifty_Views02102009.html
The presentation is only a view in the broader aspect of the market. It really is not a recommendation to take a trading/investment positions based on the views expressed. I dont know whether such a pattern is possible or not, but definitely its worth exploring in that direction......
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I am writing here after a gap of almost 8 days.....The markets didnot stop where I thought it would; instead it kept on inching upwards at a rather fast pace than expected and touched 5000 on the spot and fuures Nifty today.....Technically speaking, my last call was wrong and the call is a dead one as of now.....
But what one might expect now?
Right now, there is a strong feeling among market participants that this market probably cannot fall. There is a also a feeling that once the barrier of 4750 was crossed, the market can move towards 5200 and even above on the back of continuous FII and DII buying....
Now lets first analyze my previous posts.....
In the article published on 4th September, I gave 3 possible outcomes and concluded with a probable top between 4830 and 4850 between 9th and 11th September. We hit that level between the same dates and then carried on from there......I had mentioned that 2 waves were giving downside targets while 1 wave was still showing an upmove. But looking into the Sensex charts, I thought that the bearishness will start around 16270 (Sensex) or 4830-4850 (+ 1-2% whipsaws on the Nifty).....I had also written in one of the previous articles that S&P 500 is very very weak and is only accomodating to help Nifty move towards its target......
Now, S&P500 closed at 1068 yesterday. If it slides below 1063 on closing basis, then its weakness should develop strongly and that effect could percolate down to Indian Markets as well.....Otherwise, Nifty might continue its upward movement till 5150 (though I am not completely confident about this).....I am still confident of the downside targets of 4550 at least (if not 4200 at this moment) but for that 4930 should be broken on closing basis in Nifty Futures. If 4930 is not broken, then one should rather hedge oneself with an alternate Nifty (Nifty with mini Nifty or vice versa).
The above strategy should work under the current circumstances. May be some specific long positions in individual scripts will work excellently. Many scripts are moving 20% in a day these days....
Lets see for a few more days and I will update here the moment I need to change my views....
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I have been working on all possibilities for the last 4 hours....There are at least 4 waves occuring in Nifty Futures which makes the whole analysis very confusing....In my last article, I had mentioned of the possibilities of 16250 on Sensex and 4830 on NF. Both were met today and that too in only 3 trading sessions.......Really fast !!!!!
Now what?
The following things are observed in charts.....(more or less in both Nifty and Sensex)
1. Nifty has crossed 61.8% Fib retracement of the entire bear fall of 2008 and apparently entered into a new buying phase (for most retailers) while Sensex didnot and is currently just holding onto that level....
2. There are huge negative divergences found in the weekly charts of Nifty and Sensex......(look into the MACD, RSI. Further weekly stochastics have moved into the overbought region. In the last 3 trading sessions, daily stochs has moved from the oversold to bought territory....
3. The waves in the Nifty has completed 2 full wave cycles while that on the Sensex is just about to complete the 2nd cycle. Now the chances of going down to complete the bearish leg is more likely.
Given the above circumstances and also the S&P500 being weak on charts, I expect the Nifty and Sensex to top in a day or two. Barring a whipsaw of 1-2%, the Nifty should come down to 4200 and Sensex towards 14100. Yesterday's high should be taken as a top with a 1-2% whipsaw....