Saturday, November 17, 2012

USDINR, Nifty - Elliott Wave Analysis

A monthly and weekly fractal charts are attached above for USDINR. Let me make it clear in the beginning, that the EW counts on the charts are not permanent, they are subject to change and are the best I could manage at this moment. Taking it further, I believe we may not have finished the advance that begun in mid 2011. I can see a "rising wedge" type of pattern developing, and we may need another new high before we can think about the completion of this pattern. My guess is we may find resistance around 57.35 range. One caveat though, if we reach the 57.35 level, and reach there in relatively short time span, the technical position need to be checked before making an opinion about the future direction of the markets. Right now momentum indicators are waning with each new high. That should alert us, while expecting more upside in this counter, but there have been instances of multiple divergences and even multiple divergences failing. So stay with the trend till there are clear signs of revealing.

Today, I am proposing a radically bearish count, for Nifty. There is a chance of a wave [5] of wave {B}having failed. Once again, the counts are subject to change, one must constantly measure the technical strength of the moves to keep a tab of developments in the markets. But if the wave [5] failure gets confirmed, we could start our way down on wave {C}, and the consequences need not be explained to an Elliottician. We can see that the momentum indicators are diverging and that is never a good sign. The overall structure of the momentum indicators is not in favor of a long term advance, the technical structure for the whole up move of 2012 is akin to a "bear market bounce" at best. If some critical supports are broken on the downside, we may see the down move accelerating.
On the shorter term though, what is important is to try and anticipate where this current fall, may find support, so that a bounce develops, and we can better position ourselves for a deeper cut, presuming our wave [5] scenario plays out. There is an important gap area at 5530-5455, we need to monitor how prices behave around this level to get a clue about future developments in Nifty.

Note: I don't mind criticism as long as it is constructive. I can't predict the future, neither do I want to, I follow my trading system, and try to share what I have gleaned with those who find it useful to listen my views. Please forget what I have written if you don't find it useful, after all we have all read newspapers (much worse financial media) at some point in time in our life.

7 comments:

  1. haha... tension ko maaro goli , manao happy diwali !

    Barobar lihile ahes,

    EW lables are only human perception @ best, its the attachment that brings all the baggage :-)

    cheers

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  3. sir but if we consider shorter term then..latest top of nifty was placed @ 5777 and previous bottom was @ 5583, yesterday 5583 low was broken, means it has taken in fast time to brake 5583 from its latest high so can i say market has very good support near 5389, and this area is also 78% retracement level of 5215 to 5815?.....

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    1. Dear satyajeet,
      A couple of pts needs mention. Which levels provide good support depends upon, what long term structure is playing out. The present count suggests we might be starting a prolonged bear campaign, in that case we might get temporary respite at these once strong supports, only short term strength to be sold into.
      Your pt abt faster retracement more often than not suggests change in the trend. So I would say my reaction to imp levels will depend upon larger market structure. And according to the present count it could be bearish.
      Regards
      Aniruddha

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  4. Hi Aniruddha,

    Its still difficult to say that 5th has truncated at 5777. We still might be in 4th wave of Flat.
    I cannot see clear 5 wave move from 5583-5777. Rather it looks 3 wave move. Hence I have marked it as 'b' of Flat and current fall as 'c' of 4th. Which might have been over. And we might head in 5th wave higher to 5950-6040..

    But Overall Long Term Picture is quite Bearish.. This Entire 2012 Rally might be B wave or even wave 'ii' of 'C' of Flat started in 2010.

    Thanks & Regards,

    Harsh Dixit.

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    1. Dear harsh,
      Your observations are noteworthy. We may still be in a flat correction, this possibility was pointed out in my last post. However EWP rules and guidelines can give us key inflection points where counts are invalidated or confirmed. This is one such situation, below the gap mentioned above, the flat scenario becomes unlikely and the next plausible one right now to "me" is that of a possible failure in wave [5].
      I have already said that this count is not permanent but may change.
      Thanks for the comment.
      Regards
      Aniruddha

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  5. You have change the labels in your recent update and you labeled as said earlier by me.

    My earlier comments...."waves [2] and internal(1),(2),(3),(4)...these all are of same degree...!!! So label should of same degree..." and "Right labels always gives right prediction.."

    Such type of dogmatic analysis not allow in Elliott wave....!!!!

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