Nifty Retracement and Moving Averages along with Wave counts

In our previous update we had mentioned  that move below 5880 will drag markets to 5820 over short term. Nifty on Thrusday shed gains with almost 100 pts and made a low of 5836 on Friday after failinf to cross 5970 on Wednesday.

We had also mentioned that Nifty will come down to 5600 over medium term till February 28 or till March 02, 2013 which is the post pattern target. Now the only concern is the entire fall after the pattern breakout was corrective. For the target to achieve it should be an impulse move as it has to be in sync with time.

Moving averages work very precisely in trending market. We are using 20 and 50 days moving average and we witnessed a bearish crossover as 20 day moving average crossed 50 sma from above which has turned the short term trend from positive to negative. Currently markets are hovering on the support of 100 sma, for a medium term trend to be bearish 50 sma and 20 sma need to cross 100 sma from above.

We have taken retracement levels from wave 4 which is the starting point of the wedge pattern and 61.8% retracement comes to around 5780. So now we have almost 3 levels for the broader markets which can come in coming days.

As per wave perspective, after completing wave 5 at 6112 prices moved lower in a corrective fashion by forming triple zigzag pattern (a-b-c-x-a-b-c-x-a-b-c). Currently Nifty is moving lower in the form of wave b after completing wave a at 5970 which are the internal wave counts.

Majority of the indicators are negatively poised as RSI continues to stay below 50, MACD is in sell mode February 1st week and it is now below the equilibrium, OBV started to form a lower high and lower low formation which is a negative sign.

In short, Nifty will now move to 5820-5780-5750 over short term once 5830 is taken out on downside. The overall bias continue to be negative as far as 5930 is protected on upside.


Phani Kumar said…
Hey, thanks for the information. your posts are informative and useful.
Patel Integrated
Pradhin Ltd

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