Nifty on 13 October 2014 : Wolfe Waves - One on Target, Second yet to Launch

The Wolfe Waves aka WWs are depicted in blue and black in the chart below :

Indications are that Nifty may head for 8100+ very rapidly.  Possible paths are depicted on the chart.

7740 remains the SL for longs.  Shorts however must keep SL at 7975 or 8035 as per own risk appetite.

Nifty 04 September 2014 : Last week did clear some clouds but what next?

Last month I wrote on possibilities that were emerging in Nifty at Nifty Trade Setup 21 August 2014 : The most crucial phase for both bulls and bears and Nifty on 27 August 2014: The highs may still be counting but its time to look lower and had mentioned certain levels to resolve certain possibilities.  At this juncture, most of the possibilities that were mentioned has been resolved and possibly few more have emerged.  Let us see what they were and whether they remain valid.

The possibilities that were held firm till last month are:

Expanded wave from 6357 made in January 2008....invalid now.
Expanded wave from 7841 made last month....invalid now.
ED from 7118 made on 30 May 2014......invalid now.

With the expanded possibilities invalidated, it will be safe to assume that Nifty is still in the initial segment of a long long journey.  Since 2008 the lowest point touched was 2252 and assumption of an impulse having commenced from this point would not be totally misplaced.  However, a confirmation would still be required at a future date as and when it comes. Let us see the impulsive compulsions of this move:

(I)	:	2252	-	6339	=	4087		100
(II)	:	6339	-	4531	=	-1808	(	-44.2378	)
(III)	:	4531	-	11144	=	6613	(	161.8057	)*

What is visible here is that (III) will become extended only above 11144 at 161.8 %.  But it should also be kept in mind that (III) has potential to scale upto 21900 at 425% if it decides to do so.  Since the move is presently in (III) let us see what is happening there.

I	:	4531	-	6229	=	1698
II	:	6229	-	5118	=	-1111	(	-65.4299	)
III	:	5118	-	8142	=	3024	(	178.0919	)*

Here III has already become extended, however, it must be remembered that it has potential to go upto 12334 at 425%.  Now let us see what is happening within III.

1	:	5118	-	6415	=	1297
2	:	6415	-	5933.3	=	-481.7	(	-37.1396	)
3	:	5933.3	-	8142	=	2208.7	(	170.293	) *

Here again 3 has already become extended, however, it must be remembered that 3  has potential to go upto 11445 at 425%.  Now let us see what is happening within III.

Here it is worth while to mention that there is another alternate which validates the move from 6357 (Jan 08) to 5116 (Aug 13) as a CT.  Even if this be the case, the move from 5118 should resolve as an impulse as it progresses.  At this juncture 5118 onwards is where the concentration should lie for most ellioticians as the previous move are yet to go a long way for any meaningful resolution.  Now let us see the other possibilities from 5118.

Alternate 1

1	:	5933.3	-	6869.85	=	936.55
2	:	6869.85	-	6638.55	=	-231.3	(	-24.697	)
3	:	6638.55	-	7809	=	1170.5	(	124.9746	)
4	:	7809	-	7422	=	-387	(	-33.0642	)
5	:	7422	-	8145	=	723	(	161.888	) Max

Here 3 is extended with respect to 5 till 8145 and a tick at 8146 will make this alternate invalid.

Alternate 2

1	:	5933.3	-	6869.85	=	936.55
2	:	6869.85	-	6638.55	=	-231.3	(	-24.697	)
3	:	6638.55	-	7809	=	1170.5	(	124.9746	)
4	:	7809	-	7540	=	-269	(	-22.9826	)
5	:	7540	-	8263	=	723	(	161.888	) Max

Here also 3 is extended with respect to 5 till 8263 and a tick at 8264 will make this alternate invalid. 4 is labelled at 7540 is this case.

In these two alternates the 3 has been considered completed at 7809 (I am not convinced on this).  So let us see if the 5th in each case shows up as an ED or an impulse.  This is the best I could get to.

Alternate 1

i	:	7422	-	7841	=	419
ii	:	7841	-	7540	=	-301	(	-71.8377	)
iii	:	7540	-	7968	=	428	(	102.148	)
iv	:	7968	-	7862	=	-106	(	-24.7664	)
v	:	7862	-	8141	=	279	(	65.18692	)

This possibility has gone beyond the limits for any possibility of an extension of iii with respect to vth.  Hence vth itself will need to get extended for which it must cross 8540.

Alternate 2

i  :  7540  - 7968   = 428 ii  :  7968  - 7862   = -106   ( -24.7664 ) iii  :  7862  - 8141.75   = 279.75   ( 65.36215 )* iv  :  8141.75  - 8030   = -111.8   ( -39.9464 )** v  :  8030  - 8203   = 173   ( 61.84093 )**

In this, iii may or may not be complete.  iv has scope to go down till 7969.  v must cross 173 points and must not cross 8263.  Because if it does, higher degree count will become invalid.

Most Acceptable Count

i	:	5933.3	-	6869.85	=	936.55
ii	:	6869.85	-	6638.55	=	-231.3	(	-24.697	)
iii	:	6638.55	-	8141	=	1502.5	(	160.4239	)*

iii here may still be continuing and would become extended above 8154.  It also has scope to go till 10618 at 425%.

(i)	:	6638	-	7809	=	1171		LD
(ii)	:	7809	-	7540	=	-269	(	-22.9718	)
(iii)	:	7540	-	8142	=	602	(	51.40905	)

Here (iii) must go beyond 9435 to become extended.  Will it go?  Time shall tell.  There is an alternate for this which can finish the move below 8290 and may have already finished, but I am not really convinced on this one.

Trade Setup


For Bulls: Go long near 8030, SL 7967 Target 8555.
For Bears: Go short near 8140 SL 8155 Target 8030/7969/ 7862/....7700/7300


PS.  I will try and include charts in this post at a later stage.  But members may consider drawing their own charts for these counts.

Nifty on 27 August 2014: The highs may still be counting but its time to look lower.

I wrote about my appreciation of Nifty in my last post Nifty Trade Setup 21 August 2014 : The most crucial phase for both bulls and bears. It is clear now that none of the possibilities mentioned in the last post hold any merit and a re-orientation of EW needs to be done.

The perceptions upto weekly still hold good, but, the thoughts on daily chart needs to be re-organised.  With breach of 7959, the possibility of an ED from 7118 becomes invalid and leaves few other possibilities in its wake for ellioticians to ponder upon.

If we consider the move from 4531 as shown in my previous post, the third wave is already extended. However, within the 3rd wave starting from 5118, the moves have become complicated for an impulse.  My endeavour will be to resolve this segment to acceptable possibilities.

As impulse, with the possibility of 3rd extension, the move from 5118 seems to be shaping up as below:

1	:	5118	-	6415	=	1297
2	:	6415	-	5933.3	=	-481.7	(	-37.14	)
3	:	5933.3	-	7968	=	2034.7	(	156.88	) of 1 and

continuing to get extended beyond 8031.

At this juncture, not much clarity is shown by the moves from 5933, especially when all the ticks are accounted for.  However, if closing values are taken and help of other indicators are used to identify the fractals, a possibility emerges.   For which, EW counts for the fractals of move from 5933 may be developing as below:

i	:	5933.3	-	6869.85	=	936.55
ii	:	6869.85	-	6638.55	=	-231.3	(	-24.697	)
iii	:	6638.55	-	7809	=	1170.5	(	124.9746	)
iv	:	7809	-	7422	=	-387	(	-33.0642	)
v	:	7422	-	8001	=	579	(	61.82265	) of i **

 Where v th has to push between 8001 and 8145 to keep iii rd extended and i st unextended.  It should also go past 8031 to get 3 rd wave of higher degree extended. The wave itself may be developing as an ED as below:

1	:	7422	-	7841	=	419
2	:	7841	-	7540	=	-301	(	-71.8377	)
3	:	7540	-	7968	=	428	(	102.148	)
4	:	7968	-	7658	=	-310	(	-72.38	)**

5

:

7658

-

8095

=

437

(

102.1028

)**

The point to remember here is that the 5th must go beyond 8001 but cannot go beyond 8145 because if it does, the higher degree presumptions will become invalid.  It also needs to go beyond 8031 to make the 3rd wave at a higher degree extended.  The whole setup are depicted on the chart below:

Now let us see how the fall from 7968 has developed so far.

Simply put, the fractals of the fall may have developed to satisfy this

A     :     7968.25     -    7874.05      =    -94.2           
B     :     7874.05     -    7915.45      =    41.4      (    -43.94904459    )
C     :     7915.45     -    7862.7      =    -52.75      (    55.99787686    )
                               
    T1:    7857.2344    ,  T2:    7821.25    ,  T3:    7763.0344

It may still continue in this manner, as long as 7915.45 is not taken.  However, if we look at it a little differently, we may see fractals of B developing in the following manner.  (If 7915.45 is taken out, the possibility will continue to exist as long as 7968.25 is not taken out.  I am banking on T3 of B, which is the most probable target of an expanded.)

a     :     7874.05     -    7915.45      =    41.4           
b     :     7915.45     -    7862.7      =    -52.75      (    -127.4154589    )
c     :     7862.7     -    7929      =    66.3      (    160.1449275    )**
       
T1:    7888.2852,  T2:    7904.1,  T3: 7929.6852,  T4: 7971.0852   

With 7929 in focus for end of B, the possibility for C is as below.

A     :     7968.25     -    7874.05      =    -94.2           
B     :     7874.05     -    7929      =    54.95      (    -58.33333333    )**
C     :     7929     -    7862.7      =    -66.3      (    70.38216561    )**
       
    T1:    7870.7844    ,  T2:    7834.8    ,  T3:    7776.5844

A breach below T3 will prompt me to change to counting it as an impulse and target 7730 for an A wave of the corrective.  Till then, 7780 remains my target.

The chart depicting the setup is as below:

Nifty Trade Setup 21 August 2014 : The most crucial phase for both bulls and bears

I had posted my views on Nifty a long time back in Nifty 14 January 2014 : Three Wolves, All Pointing Downwards and Alive.  While one of these wolves met the target, other two fell short.  Subsequent rise continued to push Nifty towards unscaled levels  and here it is...at levels that may be extremes of some of the possibilities.  Let us see how Nifty is shaping up.

Monthly

In monthly, the price action has reached the UTL of a very LT EW channel.  Getting resisted here is highly probable.  Another aspect that needs to be kept in mind is that the move from 6357 (marked as A) continues to hold the possibility to turn into an expanded till 7925.  If we look at the indicators, the negative divergence in both RSI and BEBO are held wrt A, but, there is no negative divergence within the move from 2252 (marked B).  I infer that the current rise still holds momentum for newer highs in future.

Weekly

The EW labels and possible channels, as perceived by me, are marked on the chart below. No negative divergence visible in both RSI and BEBO.  The EW ratios work out as below and clearly shows that the current move from 5118 as 3 has become extended:

1	:	4531	-	6229	=	1698
2	:	6229	-	5118	=	-1111	(	-65.4299	)
3	:	5118	-	7922	=	2804	(	165.1355	)

Daily

The EW labels and possible channels, as perceived by me, are marked on the chart below. Negative divergence is visible in both RSI and BEBO. But the pattern of the indicators keeps me concerned on the positioning of black iii.   The EW ratios work out as below and clearly shows that the current move from 5118 as 3 has become extended:

i	:	5118	-	6415	=	1297
ii	:	6415	-	5933.3	=	-481.7	(	-37.1396	)
iii	:	5933.3	-	7563.5	=	1630.2	(	202.9	) of v
iv	:	7563.5	-	7118.55	=	-445	(	-27.2942	)
v	:	7118.55	-	7922	=	803.45	(	61.9468	) of i

 

While we can delve deeper in the monthly and weekly charts later as the moves evolve, let us see certain key elements of the daily chart. 

Firstly, in the above counts, ii and iv both are shallow.  I have seen it happening on occasions and hence tend to accept it for the time being.  Within iii, the (iv) is just 17.66 % and this one is also accepted with a pinch of salt.

Now, if this is how nifty is shaping up, then,

v should finish between 7920 (already done) and 8126.  If 8126 is violated, nifty will have to scale 9217 to make v extended wrt i.

To resolve the possibility of an expanded move from 7808, nifty need to cross 7956.  If it does not, the possibility will remain alive.

If v is developing as an ED as shown, maximum it can go is upto 7959.  Above this, (iii) of the ED will become smallest, which is not permissible and a reorientation will be necessary.

Given these parameters, 7920-7925 and 7956-7959 bands are crucial.  Ideally, if Nifty reverses from 7956-7959 band, all expanded possibilities would have resolved and what will follow would be 4 that may bring a decent reduction to the levels of Nifty.  Minimum expectation will be 7260 at 23.6%.

State Bank of India on 16 February 2014 : Remains Bearish.

I wrote about my perceptions on State Bank of India in my post SBI 12 August 2013 : An Intermediate Bounce is Due and I was prompted for an update elsewhere.  My perceptions continue to remain similar with nothing much to add but it would be worthwhile to post updated charts for the benefit of the readers.

Monthly

Chart posted on 12 August 2013.

























Updated Chart.  The black channel is already breached and purple LTL is yet to be reached.  The intermediate bounce is already over.

Weekly

Chart posted on 12 August 2013.

Updated Charts. 

The green TLs in the chart below are likely to support the fall.  A WW shown in black will be completed once the price action goes below the Black LTL below 1200 to complete the 5th point.  The target for this WW thereafter will be above 2700.  I am expecting the fall to finish between black LTL and purple TL.

 The chart below shows the channels in the moves so far.  Some TLs are shown in purple, which would be of significance.

 The chart below shows two incomplete WWs in black and purple.5th of the smaller one, shown in purple, will complete below 1300 and that of the black one will complete below 1200.  This also shows that the black wollfe will be invalid if the price action goes below thick black TL.

Daily
Chart posted on 12 August 2013.

 Updated Chart.  An additional APF is drawn black and its median coincides with 1300 and LTL coincides with 1200 or lower.

 Hourly

Moves are perceived as the two possibilities shown below.

As long as the UTL of black channel is intact, the bears should prevail.  The consequent targets could remain as 1300 and 1200 and possibly 890 or lower.