NIFTY WEEKEND ANALYSIS for week ended 25th Feb. 2011

Feb expiry ended adding only pains to the buyers (Indicated in the weekend analysis for weed ended 18^th Feb.), like Jan expiry the imp support was broken (5600 for Jan expiry which was respected by the bears till the very end of the expiry)           

Let us see the Elliot Wave Count as posted last weekend:       
wave 1 down: 6312-5762=560 points 
wave 2 up: 5762-6152= 405 points     
wave 3 down: 6152- 5177= 975 points           
wave 4 up:5177-5599 =422 points                    
Wave 5: down from 5599-??????

            Possibilities are 1). Same length of wave 1 =560 points or 5039

                                      2). 1.618 times wave 1= 906 points or 4693

                                            Fail to break 5177(previous low) will make this wave count invalid. Suggesting sell below 5177 only

 Ichimoku: After giving another bearish signal on 18th Feb with the nifty falling below (5530) the indicator has already given more then 500 points since 14^th Jan (fall from5829-5303). A rise above 5469 only will be bullish.    

Bollinger Band: Nifty is near the bottom of the band @5220, and for the first time since the fall from 6181 the band has started to shrink, indicating the bottom might be already in place or near bottoming out. Monthly close on 28^th if above 5276 will be a good sign for the wounded bulls.         

PCR: As indicated in the last weekend update PCR above 1.2 was always dangerous so either the PCR had to come down or the Nifty. The nifty obliged and the expiry definitely was good for the followers of this study.As of now the PCR is near 1.00 indicating indecision.

           
Friday Factor: Continued from last weekend:

 (4th Feb Friday nifty started a faster falling journey south from 5559 to touch 5177 to following Friday the 11th Feb, from there a faster replacement back to 5599 on Friday the 18th Feb, another big fall on Friday, will this open another gate for a steeper fall. The volume during the week was less then the average, only to be high on the closing day of the week.)

Friday 25^th Feb. also the first day of the new series saw a very volatile day(probable the highest volatile day in the near history)After opening with a gap and making a high of 5330+, saw nifty falling to 5230 and again rising steeply to nearly the days high, close almost flat  (will this be another reversal????)   

Scam Hit Indian Economy: Formation of JPC may or may not be good for the economy but at least as of now the pressure on Govt. from the opposition will easy ensuring smooth functioning,

Inverse Correlation with the US and European Markets:  In the past year or so the Indian markets have shown inverse correlation with the major and developed markets, when these were under tremendous pressure our markets were continuously on the rise, now they are on a rise and we are correcting. Suggesting the wise money is correctly moving between the developed and developing markets, good thing for us is that the money is not going out of India and only shifting to Debt from equity.

Union Budget: With the railway budget being a non event and the limited expectations from the union budget on Monday would be a big event either.

Are we looking forward to bigger reforms from our dear Pranab Da, probably no because we know that he is not a person who can be called a great reformer, our Mr. Prime Minister is surely one, Pranab Da has people like Montek Singh who are good economist but the question is , is he being  heard at all??? as there are limited or no expectations from the budget, the nifty can do the most obvious thing in the most un-obvious way by moving north.

Will update in details on: the Nifty continuation of patterns later today.