Nifty 16 March 2013: Picture Gets Clearer

The see-saw in Nifty is likely to continue till March 2013 expiry and the moves are going to be oriented around 5850. The chart below endeavors to depict the path Nifty is likely to follow in the coming fortnight. There is an APF drawn in Red color (and believe me there can be many more drawn) and as I perceive the moves of Nifty  is going to be defined by this APF for some time with support from blue and green channels.

There are three WWs forming in Nifty and I expect them to compliment each other while they evolve their right shape.  I have already talked about two larger ones in my post Nifty 11 March 2013 : Two Potential Wolfe Waves and for the third to complete, Nifty must go below 5790.   

As per EW, as counted in isolation from 6112,  the fall to 5664 could be either a 3 wave or 5 wave ( and I am inclined to see it as a 3 wave form).  Inference would be that either the corrective got over at 5664 or only the A of the corrective is done.  I am taking it as A because EWO says so.  Hence B should do a minimum of 90% of A, which will take Nifty beyond 6067.  B.a again looks a clear 5 wave form to me and hence  I expect another rise, which is in line with the expectation for B.  However B.b is presently doing its own (c) (I expect (b) to be over already and (c) already started but the confirmation will come later).  Now if the fall from 5945 is B.b.(c) then it either show a 5 wave form either as an Impulse or an ED.  I am inclined for the former and expect it to complete between 5760-5720 by Monday close.  B.c and C will follow as 5 wave forms as shown on the chart.

EWO wise, at (c) it should go below (a) easily but when it rises for levels beyond 5972 it is bound to show negative divergence in hourly chart and indicate completion of B and indicate a shorting opportunity.

Trade Setup



For Bears : Good shorting opportunities would be available near or above 6070 only with SL of 6113 and target of 5650 or lower.

For Bulls : Go long between 5760 and 5705 with a SL of 5660 for a target of 6067.  Those inclined to hedge, may take 5700 options when the market opens without a gap down on Monday.

Nifty: The Possible Route

The chart below shows the possible path, which could be followed by Nifty in next two to three days.  The APFs and WW supporting this view are also marked on the chart.  The reader should not forget the WWs that were posted in this blog yesterday in Nifty 11 March 2013 : Two Potential Wolfe Waves .

Nifty 11 March 2013 : Two Potential Wolfe Waves

On Nifty there are two potential Wolfe Waves (WW).  Both shown in the chart below with the expected imaginary points that will be defined within two to three days...

Trade Setup

For Bulls -  Fresh longs can be initiated at thin red TL (roughly 5820) for a target of 5971+ SL 5776.

For Bears - Shorts can be initiated close to Red UTL with SL above Blue TL for a target of 5820, 5636, 5500, 5350.

DLF: In a Corrective

DLF shows huge promise for bulls.  But, it presently seems to be in a 4th wave corrective, which has been depicted very simply in the chart below but can confuse the hell out of best of the ellioticians.

Update of DLF as on Holi day : 27 March 2013
The chart is posted below and I must admit that I used some vibrant colors on the chart to symbolise the festival of Holi:
 

As I perceive, the green line from point 2 (in blue) alongwith LTL of blue APF should provide support to this fall, which I am assuming to be the 3rd fractal of an expanded corrective.  Broadly, we could also see a Wolfe wave forming, which is marked with blue numerals.  5th of this wolfe should go above yellow UTL close to T2 on the right corner of the chart.  The perception of an expanded corrective needs to be thrown out of the window, if and only if, the price falls below green LTL and sustains in red zone.  My perceptions of the future moves in DLF are based on the blue and + purple APFs alongwith  WW.

Pessimistically, I am expecting a rise through C (which may morph into 3rd) after the fall is done.  Target for C could be near 300, but if it turns out to be 3rd, it may well go towards 400 zone.  If and when it crosses above upper yellow line (without crossing the lower yellow line, which will make the WW invalid) , the upper yellow line will become the pivot and longs can be retained with SL inside the upper edge of the amber band.

The Trade Setup

For Bulls:  Long as close to 217-220 band, with SL below  median line of brown APF initially (which could be shifted to just below the LTL of blue APF once the price stabilise in yellow band) for a target of upper edge of amber band and beyond yellow UTL.

For Bears: Shorts can be initiated close to median or UTL of purple APF with SL above UTL of purple APF for a target of LTL of purple APF.  Not very convinced of this one but if it happens, DLF may land up close to the green line drawn at right bottom corner of the chart.  Ideally a short at 252 with SL 255 (adhoc) and a short at 280 with SL at 282 for a target of 180 gives a good risk reward setup.

Nifty : A Post Triggered by Raghu ji

 Today, my perceptions posted in my last post Nifty : The possibilities and the Trade Setup for 25 Feb 2013 had some very valid and crucial observations from Raghu ji, who writes his interpretations on Nifty at Jackpot Trades and whose precise one liners induced me into learning the TA with a little more sincerity.

I did submit my own observations to him to justify my perceptions, but, they made me keep my thinking hat ON for the entire day.  After a lot of deliberations, I still find that I am unable to find an alternative to my perceptions posted in my last post.  I find it worthwhile to post those factors that induce me to affirm these perceptions (many of which were also submitted to Raghu ji) so that readers can make a more informed decision for themselves.

Support in the Daily Chart

There are many APFs, which have there median lines and forks aligned close to the levels I mentioned yesterday.   Along with these, the channel drawn using the TL 5815-6112 and its parallel from 5548 also has its LTL near the support level.  The longer term APF on the daily chart (in red) and the broader channel, in which I expect the move to take place,  (in black) are shown in the chart below:


 

Support and Resistances in the Intraday Chart

In the intraday chart, again the APFs are aligning themselves beautifully to indicate the halt zones.  Have a look at the chart below.  The readers may find it quite cluttered up but kindly bear with me as I want to show the confluence zones of the possible APFs.  The readers may match the text of a particular color on the chart with the APFs drawn with corresponding color.  Notice the purple UTL, blue median and red UTL near 5900.  Also notice the green LTL and purple median near 5830 (which also corresponds to the support of the previous chart).   Last but not the least, notice the green median, which lies near 5980 and is the target of the WWs I posted yesterday.










Support and Resistances Provided by Three H&S patterns 

The chart below shows three thick lines in red green and blue.  All are necklines of potential  H&Ss.  Each neckline is also associated with two TLs drawn as thin lines of same color.  These TLs are basically drawn from points defining the neck to the top of the shoulders on the opposite side.  They all provide support and resistance and we need to watch the Blue neckline for the time being.


 
 Now, if we were to follow these indications, what happens to EW?  I would think of two options.

First, is to ignore the tick violating the previous high, take the closing value of the candle and continue with the assumption that an ED is over.  Consequences?  A rise is due, which may or may not stall near 5980.

Second, is to take the move from 5879 as an ET, in which case, its 5th fractal has to go beyond 5971 and C downwards has to follow.  This C can do 145 points and get over or it may continue till 377 points.

What will distinguish these two options?  As far as I can see, it can be resolved only if Nifty goes past 6112, in which case, Nifty indeed did an ED. Otherwise, consequences in both the counts would not be any different.

While we wait for the moves to tell us what is happening right now, I will still find the WW target of 5980 with a SL below baseline of the WW a very lucrative option.