NIFTY WEEKEND ANALYSIS for week ended 26th March. 2011

Nifty started the week on a positive note and continued to rise through out the week and closed at 5654 as compared to previous weekly close at 5376.95. A good gain of nearly 280 points for the week and expiry near the corner could take the bears for more ride and more pains for the put writers, who have had two very good expiry as nifty closed at the low on the expiry day.

Let us see the alignment of some of the key technical Indicators

 Elliot Wave Count:
wave 1 down: 6312-5762=560 points
wave 2 up : 5762-6152= 405 points
wave 3 down: 6152- 5177= 975 points
wave 4 up : ????????                     
      possibilities are23.6% @ 5177 to 5414= 237 points (achieved)
                            38.2%@ 5177 to 5562= 385 points(achieved)
                            50% @ 5177 to 5681= 504 points??? is 4 up over?????
Is it Flat Correction or a five wave Triangle, and e wave of 4 ended on friday ????  4^th still on or is it over???. will have to see the price actions as it unfolds during the week(Other EW possibilities also exist, to avoid any confusion to the readers posting only what looks like the most obvious count)
Wave 5 to follow

BUZZINGNIFTY: POSSIBLE 5 WAVE TRIANGLE IN 4TH WAVE

 Ichimoku: Gave a weak buy signal on 4^th March with the nifty around 5420 level then a sell signal during the week and almost turned up again in buy mode on friday. For the first time since the fall from Jan the price action have moved in the cloud, will gain more strength when the nifty would start trading above the cloud.

BUZZINGNIFTY: ICHIMOKU- KOMU

 

BollingerBand: On daily charts the nifty has finally broken the range and trading above the upper-band, ideally this is a good time to go shorts but since the monthly and weekly are near the mid band nifty could still continue the journey north even in overbought conditions in daily charts

 

BUZZINGNIFTY: DAILY BOLLINGER BAND

BUZZINGNIFTY: WEEKLY BOLLINGER BAND

 In the weekly chart the prices rose from the bottom of the bollinger band, first resistance would be the mid point of the band currently at 5690, which is also the target for 4th wave up.

BUZZINGNIFTY: MONTHLY BOLLINGER BAND

 Since the recovery from the 2008 global meltdown price action in Nifty has never been below the  monthly mid-band of the bollinger band, indicating that we are still in bulls market, after touching the midpoint of the band last month, and consolidation followed and on Friday the close was at months high point, the upper boundary of the band is currently around 6100 odd level.

 

DEATH CROSS( 50DMA Crossing  below 200DMA)

The DEATH CROSS was Formed in Nifty on 4th March 2011, It is considered highly Bearish, The Last Time when we saw this formation Nifty slipped from 4800 levels to 2300 odd Levels, as the name itself indicates highest degree of Bearishness there is a lot to cheer in the bears camp at the moment. The only hope for the bulls is that the 200 DMA is still rising.( Ideally both moving averages should be moving down in this formation.)

End of the week and nifty decided to move past 50DMA, the next test of the strength of the bulls would be 200dma roughly around 5697 level.

Recently  there was a similar cross in S&P Index in US, but the Price movement proved otherwise,

BUZZINGNIFTY: NIFTY DEATH CROSS

  BULLS/ BEAR POWER

This is one indicator which i,ve recently added to the study, this simply indicates the power of the BULL/ BEAR as compared to the price action.

BUZZINGNIFTY: BULL/BEAR POWER

As can be seen in the Chart that the bears power has been reducing, whereas the bull-power indicator has seen a sudden rise and given a breakout from the range, indicating the bulls are not only gaining the control over bears but also able to move the prices above the range.


BEARISH FLAG
In one of the previous post we saw a triangle formation and a bearish flag in Nifty, although the triangle has given a breakout, the possibility of flag still remains.

BUZZINGNIFTY: RESISTANCE LINE

 

 

A fail to cross the resistance line would not only make the triangle break a false move, but will also see Nifty slipping to sub 5000 level , the possible target of the flag is roughly 950 points.


A cluster of resistances for nifty on the way up, a close above 5700 will give bulls more strength, making  this a good point to go shorts with small stop-loss, above this we might well be moving to newer highs.