iCharts Discussions

[kmlsoni]

For bull market confirmation; higher bottom higher top formation still pending. This correction may fulfil this condition also.

[kmlsoni]

[kmlsoni]

Failure to hold 16700-800, opens the possibility of complete retracement of last leg below 16600 / 16490, which would be a big step in turning the structure negative.
Violent retracement below 16490, and thereafter 16000, would indicate termination of current rally of last 6 moths over.
Wait, therefore, for such a violent action below 16K to confirm the suspected bearish pattern implication. Remember, absence of downside violence could reject the bearish implications for the time being.
A violent retracement below 16K would break the trendline, shown on the Weekly chart, which would then be shown as a “Truncated Zigzag”. Such a Truncated Zigzag will have bearish implication of minimum 81% retracement. This would calculate to about 10500. The post-election-result gap-up area at 13500-12200 could be just one stop on its way to 10500.

[kmlsoni]

Last week I said, “Sensex created a gap-up action at 17068-117, which appears a crucial technical area … For any negative scenario, we need a sell-off covering this gap-up area on closing basis …”

As for the Moorat session high near 17500, it was mentioned that “17500 would be (1) Gap-up measurement (2) Equality of ‘a’ and ‘g’ (3) Equality of ‘E’ and ‘G’ (4) Resistance area near May’08 highs … bears can win if we see Sensex trading consistently below the Moorat session low at 17260 …”

Sensex did trade below Moorat session low on Monday, and had closed below the gap-up area at 17068-117 by Wednesday
The assumed wave-structure shows equality between “a” and “g” of the Diametric formation inside the bigger “G” leg. Within the larger Diametric formation (2nd corrective of the Double Diametric), it shows equality between “E” and “G”.
Comparison between “E” and “G” also shows divergence in terms of PPD (points per day) parameter, despite 4-fold increase in FII inflows.

While “E” leg measured 2750 points (from 13220 to 15970) @ 153 PPD over 18 days, the “G” leg was a much-slower affair, measuring 2658 points (from 14835 to 17493) @ 72 PPD over 37 days.
Last week’s action provided 1st stage of confirmation that the 2nd Diametric formation may be over, by way of faster break below its D-F line. The 2nd stage confirmation would need complete and faster retracement of “G” leg, i.e. drop below 14835.

Within the smaller Diametric inside “G”, 1st stage confirmation was provided by way of break of its d-f line. The 2nd stage would need a complete and faster drop below 16606.

Until any previous bear candle’s high is decisively taken out, the bias would remain downwards. Accordingly, until we see a decisive trading above 17032 (Thursday’s high), the bias would be negative.

The question still remains whether the Index would provide us with the faster retracement below 16606. Remember, the move from 16606 to 17493 was a 5-day affair, and faster retracement would need the Sensex to drop below 16606 today itself.

As per Neo-Wave theory, structure is assumed to have ended when we see a faster retracement of its last segment. In other words, such a faster retracement would require a 200+ point drop on Monday itself, which would confirm that the Diametric inside “G” (beginning near 14700) is over.

Since the larger structure beginning ‘Mar lows has been assumed as a Double Diametric, faster drop below 16606 could also indicate that 8-month rally ended exactly at our revised target level of 17500.

Failure to drop below 16606 today could either mean “g” of “G” would move higher to end at a failure point below 17500 OR the assumed count is faulty. We need to guard shorts against this possibility by putting SL/reverse on strength above 17050. For us, therefore, levels around 16606 would remain crucial in the short term.


- By Vivek Patil, India's foremost expert in Elliot Wave Analysis

[k25]

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[SwingTrader]

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[kmlsoni]

[kmlsoni]

The 50% correction level to the 10-day fall, at about 16384, can be considered first crucial upside. Bear market rallies generally terminate at 50% correction levels. Further upsides of about 16600 (previous low) and 80% correction level can be opened only if Sensex sustains above 16400.

Remember, the 80% pattern implication for a channeled fall may not apply if the larger structure from the high of 17493 forms like an expanding triangle. In an Expanding formation, remember, the 1st segment has to be violent but sub-standard, which is indeed the case here.

[kmlsoni]

[kmlsoni]

As for the price-structure of this rally, I pointed out that “each subsequent rallying segment has been 55% of the previous rallying segment. It indicates loss of bull-power, despite hitting newer highs of the larger rally.”
Failure to cover the falling gap of 22nd Jan, at 17000-25, could provide an advance indication of weakness (and that too, at a higher level).
Failure to hold 16K, on the other hand, could test 15600 (high of Jun’09 and 200-day EMA) or 15331 (low of Nov’09).
The 16K-mark is actually the Aug’09 high on Sensex. All previous tops are important technical levels. Holding 16K, therefore, can be considered positive.
Any positive scenario holding 16K would have potential to test 16577 (last low or beginning point of the last rally) or 17000-25 (gap-down area created on 22nd Jan).

[kmlsoni]

1. Levels of 15600-700 do achieve equality with the previous fall seen during Oct'09 (from 17493 to 15331).Such an equality can attract efforts to hold 15600-700 levels. Remember, the 15600 is also the top the Sensex made during Jun’09. It is also the value of the 200-day EMA on the Daily chart. We’ll, therefore, mark 15600 as crucial for the time being.
2. But this time 20EMA-50EMA crossover after long time.
3. As for the price-structure of this rally, I pointed out that “each subsequent rallying segment has been 55% of the previous rallying segment. It indicates loss of bull-power, despite hitting newer highs of the larger rally.”
4. Failure to cover the falling gap of 22nd Jan, at 17000-25, could provide an advance indication of weakness (and that too, at a higher level).
5. On its maturity, the ‘2003 rally got retraced by 60% in 60% time, dropping to 4227 before the next move. If the current rally matures at the current levels, it could also show a 60% retracement (11850) by March’2010."Will the history repeat itself ? Whether this happens or not, we need to be cautious on this front." Sensex, down 2000 points, the caution has certainly paid off.
6. The 1st quarter of every 2nd year has proved a turning point on Sensex’. Beginning Jan’1980, most of the turning points can be seen occurring during Jan-Mar period of an even year, as marked on the chart.
We are now in the 1st quarter of ‘2010, which is an even year, therefore, at a turning point as per this 2-year cycle.



Source: By Vivek Patil, India's foremost expert in Elliot Wave Analysis

[kmlsoni]

[kmlsoni]

http://content.icicidirect.com/ULFiles/UploadFile_2010419111239.asp

[tripathi_manu]

[kmlsoni]

The action created the biggest bear candle since 'Apr high of 18048, which measured as much as 363 points from high to low. It also broke last week's low of 17344 and last Month's low of 17276 both on the same day. With Daily/Weekly/Monthly bias now negative, Index could test sub-17K levels.
Nifty Futures (NIFTY)
CMP : 5141.85
Comment : Future discount up from 4
points to 7. Forms a sizable
Bear candle breaking
previous Weekly/Monthly
low. Sell on rallies if gaps
down, reverse if holds
5050 or 5000.
Action : Sell below 5128
Targets : 5075 / 5050 / lower
Stop-loss : 5130
May 05, 2010

Vivek Patil's Weekly Technical Analysis
http://content.icicidirect.com/ULFiles/UploadFile_201053102110.asp