iCharts Discussions

[hdobhal]

Dear Friends,

What a nice up move shown by Nifty today !!! This up move has made a lot of people to think whether the downtrend is over and are we in a new bull phase?

Well, As I have been posting here for so long the charts showing a Bear Market, my views are still intact. I've attached EOD chart of Nifty with only three trend lines :

Line 1 - The uppermost Down Trend Line, starting from Jan High (all time high)
Line 2 - The second Down Trend Line starting from 4th Feb High.

Line 3 - The Latest Support line in this downtrend starting from Jan low.

As you can see the Line 1 is still too far away. So let us see the Line 2. Today Nifty managed to almost touch that line, which should act as a good resistance for Nifty even tomorrow. The level comes around 4670-80. Given the volatile Global Market Conditions, this res can be taken out overnight. If Nifty opens above 4680 tomorrow and moves up, then there are good chances it can go further up.

The Line 1, although looking a little too far right now, level being above 4900, will be a BIG resistance IF IN ANY CASE Nifty manages to go there. To remind you all, Line 1 if taken out will mean the current Bear Market is in danger. But for me, the chances of that happening are almost not there. The reason is there is no fundamental support coming in the near term.

The Line 3, which was breached just few sessions back, has been restored for the time being. The slope of this line is not much and so the level is still there about at 4500.

As we can see, at this juncture Nifty is around in the middle of the range between 4500 to 4900. There are all the possibilities that this up move proves to be merely a Bear Market Rally, which will fizzle out as sharply as it came.

For those who think Nifty has found bottom, just think two points :

1. The up move is a more or less a V - shaped rally, which is not a good sign for bulls.

2. The volumes are not supporting the up move, a BO by definition happens when volume supports price action, which is not here.

So friends, All in All, I look for shorting opportunity rather than playing on the upside - After all, the Trend is best friend and At this time the Trend is DOWN.

Disclaimer: Same as earlier - Do not trade on my recommendations...


Thanks & My Best Regards
Harish Dobhal

[vjarora]

Dear Harish

Good work done.

Keep it up.

Cheers
Vikram

[rsnagesh]

Sir,

I dont think it seems to be a bear market rally. I think all levels would be taken out and every one of the ichart member family would discuss about the bull market rally on or after the first fortnight of July 2008. Its only 20 trading days to go and every one would change their mindset slowly.

Let us wait and see sir.

With regards.

(R.S. NAGESH)

[marne.vivek]

Based on EOD analysis:

Before I start, thanks harish for analyzing the EOD charts and the establishing the trendlines.

I'll touch upon Fibonacci Retracement part. We started our down move from the peak of 16 may 2008 with high of 5167.40, from where we down trended by bearish candles following day, and so on.
This fall we ended with half hearted bearsh candle, neither coould i say it to be full bearish candle nor a hammer. However, the next two days was a bullish candle following a doji and on for couple of days, with full bullish candle today.

When we plot a fibo retracement from the peak and low, we see we are now nearing the 38.2 % retracement , which many positional traders can target for short. making situation cautious, cause in case rally does not sustain here, there will be fall touching the retracement zones.

The previous fall and rise from 5268 to 4913 and rise to 5167.40 got knocked down from 61.8% retracement.

Based on intraday charts:

Chart type: 15 Min candlestick charts
Purple line : BOllinger Band
Blue Line : 50 SMA
Black Line : 200 SMA

Dow theory: based on Dow theory we continued to make Lower Top and Lower Bottoms, day in and out. There was an attempt to higher top at Point A, where we made higher top but was met by lower bottom. This continue till point B (11-6-08 : 11.00) and point C (12-6-08 : 10.15), from where started series of higher tops and higher bottoms. And from that time forward, Nifty has taken support on 50 SMA and moved up.

So until higher top & higher bottom formation is not broken, we will continue up move. For now, nifty has been touching the upper band of Bollinger Band from 17-6-08 11.30 for continuous 18 candles, with last candle been a bearish candle.

Further support is derived from Fibonacci retracements as follows:

I have contracted the chart to show from point A, where we moved down to point B to retrace to point C which is nearly 38.2% retracement from where we moved down to point D. At point A : 4714 and B is 4412, using Fibo calculator, we get tgts as follows:


Short 4527.36
Stop Loss 4598.64
Target 1 4340.73
Target 2 4225.36
Target 3 4038.73
RL Target 1 4785.27
RL Target 2 4900.64
RL Target 3 5087.27

but from 4523 nifty turned down to 4370.20, where it got stopped at point D with a consequent Bullish Engulf, propelling it to a higher top and higher bottom formation.

Now from point F to G we had a rally, where F is 4394 and G is 4562, thus creating a fibo retracement to 38.2%, where using the fibo calculator, we get following tgts:

Long 4497.82
Stop Loss 4458.18
Target 1 4601.65
Target 2 4665.82
Target 3 4769.65
RL Target 1 4354.35
RL Target 2 4290.18
RL Target 3 4186.35

where, Tgt 1 was achieved at point I, with a high of 4617, from we fell down with Nifty going over the Bollinger Band and an Evening Star, creating further room for going long.

At this stage Nifty is still in Higher Top and Higher Bottom, with a Bottom made at Point H with low of 4555.5. This is exactly 50% retracement from point H to I, giving buying opportunity and for possible tgts as:

Long 4569.25
Stop Loss 4539.75
Target 1 4646.50
Target 2 4694.25
Target 3 4771.50
RL Target 1 4462.50
RL Target 2 4414.75
RL Target 3 4337.50

Of which tgt 1 is already achieved today, with nifty ending at 4653.

Possibly we can move to tgt 1 and at any point we can mark retracement, which should be judiciously followed for further tgts, assuming we continue with higher top & higher bottom formation, in case there is a break, we need to analyze the continuing patterns with reference to EMA.

Following three charts are attached

[hdobhal]

Vivek Marne,

WOW, what a good and big dissection u've done...

U must have done a very hard work in collecting all this, Thanks Man.

See how nicely the FIB retracements are coinciding with Down Trend Lines !!!

The SL is also at the same place... the Down trend Line Line 1 which happens to be 61.8% upmove

Thanks Yaar

My BEST regards
Harish

[marne.vivek]

hey, jus saw US closing, which is not so good, didn't get into analyzing news, but just as word of caution, i am attaching herewith a week chart of nifty. The week is not concluded yet, but just to provide an insight.

We can clearly see a Head & Shoulder pattern which was posted first by Sanmen (sandeep) in his forum, just pulling a page of his book.

We have now reached the neckline and as goes the theory of H & S we test the neckline and if it hold we move down or up as the case maybe.

Following chart is attached for kind reference, where are approaching neckline

PS: We need to wait for the week to end to confirm the situation, this just an indication and a word of caution over trade

[marne.vivek]

hey harish,

thanks for the encouragement man..

[rocky5iitr]

Nifty's uptrend is likely to end soon with hardly any room for upside left.Today's high was 38% retracement of the recent 3rd wave fall.Mind you zigzag wave 4 looks impulsive and one can argue for a bull run but another big wave 5 down is still pending whose minimum requirement will be that it'll end lower than the previous low.Maximum it can be of almost 1500 points.Also the 6357-4500 ( jan fall ) was amost of 1900 points. so one can easily imagine where is Nifty headed if you subtract 1900 from 5500.Also those who are still in hangover of reliance days should realise that noting is U turn in financial markets ,a massive bull run of 5 years is not going to resume with full intensity after 5 months correction.Bull market heroes become bear market zeroes which is quite evident from the price volume divergence in bull mkt heroes like reliance etc in the so called bull run of a week.All those who really trade /invest should be cautious and not get trapped by vague logics of hypothetical patterns which has already eaten up 50% of your capital and will be surely eating rest of the 50% too if one remains stubborn and catch falling knives.These tricks work well in blowouts but now its time to be realistic and preservation of capital should be priority.If one is interested in stocks then he will get thrice the number of stocks in same amount of money as he's getting today.Bear markets are savage times and young indian blood living in a world of fantasy are actually paper tigers as they were born and bred in mature bull market.So better save your hard earned money by means of safer instruments rather than gifting it to blood thirsty bears.

[marne.vivek]

hey rocky gr8 to see your post.

Even i observed the same thing based on EOD charts.

The moment today broker called me telling BTST stocks i understood it surely would be Burial Today and Statue Tomorrow.

As we are now in Wave 4 of wave C, there can be flat triangle and using percentage value for calculating values of target, we have completed wave 3 in A in Wave 4 of Wave C, with the max tgt of 4469, which leads to start of leg 4 in Wave A in Wave 4 of wave C, where i peg targets as around 4411, which can again lead to a bounce back to the 38.2% from where the real fall should start.

Do correct me if i am wrong.

[hdobhal]

Rocky

WOW, Its so nice to see your post here. Your post here will be very beneficial to all readers. The only regret is Mayur has still not posted his analysis. btw, may be mayur and you have similar views...

I agree with your view, fully. The most important point I noted in your post is "Bear markets are savage times and young indian blood living in a world of fantasy are actually paper tigers as they were born and bred in mature bull market".

I really like your words/phrases :-

hangover of reliance days

Bull market heroes become bear market zeroes

so called bull run of a week

not get trapped by vague logics of hypothetical patterns


better save your hard earned money by means of safer instruments rather than gifting it to blood thirsty bears.

Thanks and keep posting
Harish

[sanmen]

Hi Guys

You people are rocking man!! The posts are simply great to say the least..

I guess we have been in sink with each other ever since I started this discussion on H&S pattern...

Vivek: Boss u are rocking...but why are not there in the SB during trading hours man?? YOu know i need the confidence

Keep up the gud writing and thanx for sharing the knowledge with beginners like us..

thanx

Sandeep

[hdobhal]

Dear Friends,

Its nice to have the support of real traders and analysts here. I consider myself a novice and someone who is always "open" to new ideas. The problem starts when there are OBNOXIOUS, ARROGANT and EGOIST people just trying to brush aside all hard work by sincere people like ones posting here. Anyway, I request all of the readers to see my yesterday's post and the reply of Marne.Vivek. If anyone, who is UNBIASED and open to learn, reads the post thoroughly, WE made it CRYSTAL CLEAR yesterday that Nifty is at a GOOD RESISTANCE level. Today, Nifty did try to go up, but failed miserably and that too when both Asia and Europe were giving positive clues !!!

I'm attaching today's EOD chart, which suggest only two things -

1. Nifty retraced exactly from the resistance of Lower Down Trend line and Fib retracement level of 38.2 % of the down move from 5167 to 4963.

2. All the noise created by people who don't seem to have any respect for Real TA came to a blowing end.

Friends, see the chart, see from where Nifty came down, AND see is it not the confirmation of a bigger Bear Market???

Those who brush aside all my analysis are welcome here to speak out. If they have any meaningful explanation of what is happening, what better place can be other than this one???

One guy who was asking for "where to short" in this market movement is heartily welcome to post his question here. He should just see the charts (posted here) and read the analysis and should not ask such rubbish questions.

I hereby, very humbly, ask any challenger to post his view - in complete clear format, so that all can understand.

Thanks & Best Regards
Harish Dobhal

[marne.vivek]

Nifty Analysis:

Charting 15 min intraday candles
Chart indicators:
1. Bollinger Band - Purple Line Envelop
2. 5 EMA - Red Line
3. 13 EMA - Blue Line
4. 34 EMA - Red Line
5. 50 SMA - Fat Light Blue Line
6. 200 SMA - Fat Black Line

Nifty now as per my understanding is in major wave C (4). Nifty was in wave 3 of wave C till 10 june 08 14:15. From 10 june 08 14:30 nifty entered in Wave 4 of wave C.

Now wave 4 will contain 3 wave formation as A-B-C with A having 5, B having 3 and C having 5 waves. Now i will try to construct or denominate the waves in the wave pattern in wave 4 of wave C. However in this case there are two scenario (been i novice my wave count should be audited )

Scenario 1:
Refer chart NIFTY 18 JUNE WAVE COUNT 1:
Minutte Wave (i) got completed on 11-6-08 with point 4540.70, from where we moved down to minutte wave (ii) at 12-6-08 with low of 4394.65, which is nearly 80% percent retracement to wave (i).
From here we moved up to 16-6-06 11.00 with high of 4617.45 marking completion of wave (iii) and then down move to wave (iv) marked at 16-6-08 at 15.00 with a low at 4555.50, where from we continued our upmove to today.

Now based on EOD charts we are in wave C4, where the lenght of wave c4 can 38.20% of wave C3, and 4674, and the day high was 4679.75, and the candle with 15 min lenght could not close at that point marking failed rallies. From this point marked as wave (v), at 18-6-08 first candle high. From here we moved down to wave (a) in the formation with low at 18-6-08 13.45 as 4595.80, from where retraced up 23.6% to wave (a), with a high of candle at 18-6-08 14.30 marking completion of wave (b) in the formation. Using fibo, i reckon target of wave (c) = wave (a), where length of wave (a) is 84 points, and reducing them from point (b) we get 4533 as end target of wave (c), which will mark end of wave A.

Then considering the characteristic of wave 4 to make triangle / flat, we can see sideways movement and then downside.

Scenario 2:
Going planly by EOD charts, we see a touch at 38.2% retracement marking the end of wave C4, and if we break below the previous low, we can be propelled to newer lows.

Elliotticians pls confirm.

[hdobhal]

Good One Marne.Vivek

As I am still learning EW, I think its not appropriate for me to comment. I invite Rocky and Mayur to co comment on it.

Thanks
Harish Dobhal

[sanmen]

Hi Harish/Vivek:

Gud work once again!! I really cant explain how much i have learnt from you guys!!

I am convinced (as i did write in SB yesterday during the fall itself) that C5 has started..It was great on Mayur's part to say yes to the observation...and today's fall has more or less confirmed the same..

I guess with today's effort of managing the closing, we can see some upmove (retracement ofcourse) of 50-60 pts before the fall begins again..today we nearly took out 4480 which doesnt look safe at all to me..

I wont be surprised if todays low was end of wave 1 and we see wave 2 of C5 tomorrow extending till 4560 odd levels and then a fall indicating the beginning of Wave 3 of C5..All depends on how the 4550-60 levels behave tomorrow..i have my reservations on whether that would be possible for mroe than 1 reason

1. The gap up of day before has been taken out without any problems..
2. Failure of nifty to retrace beyond 38.2% retracement level..it touched twice and fell off was steep
3. Nifty broke the lower support line of the upward wedge (bearish always) and fell heavily in no time..
4. Today nifty didnt even retrace to the first retracement level

all the observations indicating that bulls are weak and are getting weaker by the day..however i have also observed some people talking of Trin indicator showing something else..i dont know how to use this indicator hence can not confirm the same..

Nothing is true but the Markets..hence lets wait and see what happens tomorrow..

Inflation data..crude..dont know what will trigger the moves..up or down!!!!

Thanx for sharing the invaluable information guys.. and keep writing..

rgds

Sandeep