Market Analysis With Megh Mody

Anticipated on 3rd February 2013 Happened on 9th February 2013 We had mentioned in our previous update, " Nifty will now move lower and can test 50SMA which is placed at 5900 and lower trend line of the rising channel over short term." - Bang On!! After giving a bearish breakout in a rising wedge pattern prices moved lower as per our expectations and achieved our mentioned target. Nifty not only touched 5900 mark but closed below the lower trend line of the rising channel which was earlier acting as a crucial support. Nifty is quoting below 50 SMA for the first time after making a top at 6112 and it is imminent that there will be a bearish crossover of 20 EMA and 50 SMA soon which will infuse more selling pressure. In an Ending Diagonal Pattern prices retrace faster up to 1/4 to 1/2 the time taken for the entire pattern to form. So by the end of February, Nifty might test 5700-5650 or even lower till 5600. As per wave perspective, prices

Nifty has given a break of an Ending Diagonal Pattern on Friday by closing below it s previous low thus shedding around 50 points. This suggest that down trend is on stealth and broader markets will now lose its charm. Indicators like MACD is in a sell mode and is moving in sync with the index. Momentum Indicator RSI faced the resistance at 70 and lost its strength, supported by multiple of negative divergence thus indicating that upside is capped. ADX has turned from 40 and -DI has crossed +DI from below which suggests negativity. Nifty is currently below 20 EMA which changed the short term trend from bullish to bearish. From wave perspective, in an Ending Diagonal pattern (Wedge) wave 4 will always enter in the territory of wave 1 which has happened in this case. Currently market has closed below its previous low which has not happened from past one month. The post pattern implication will be a 5 wave structure on downside and will retrace 50% faster of wave 4 of wave 5. Sm

Reliance Infra: Reliance Infra bounced from 50 SMA and closed above the previous day high gaining about 4% on Friday. The overall trend looks to be negative as the stock is making lower high and lower low formation. R infra has given a bearish breakout of cup and handle pattern on Thrusday. Now it is very important for this stock to remain in a range of 555-530. A decisive move above 555 will open up positive possibilities and stock can move upto 570. As per wave perspective, the stock is moving in a corrective fashion and started 3 wave i.e simple zigzag on downside (a-b-c). Now it is very important for this stock to remain in the downward channel for next two days which will resume the downtrend.  A move below 520 will suggest that it has formed double zigzag (a-b-c-x-a-b-c). In short, expect R infra to hover near the resistance of the upper trend line of the falling channel. Move above 555 will change the trend and move below 520 will be the sign of resumption o

USDINR USDINR is moving sideways direction for almost a week within a range of 55.60-54.20. It is very essential for this pair to give a break on either side of the extremes to give a clear direction. Prices failed to cross its previous high and faced the resistance of 61.8% retracement of previous down move (56.50-54.20). The currency pair opened at 55.38 made a high of 55.48 and closed below the open price, thus eradicating all gains. As per wave perspective, prices a forming a simple correction (a-b-c) as price completed wave A at 54.20 and is moving lower, a break below 55 will confirm that wave B is ongoing. In short, our bias is negative USDINR as it will come down to test its lower extreme of the range placed at 54.50. EURINR EURINR bounced back form the lower trend line of the rising channel. The overall structure is positive as the currency pair is forming higher high and higher low. EURINR took a support at 61.8% retracement and managed to move above 72.30 whic

From past nine months after making an important pivot low of 4770 prices started to form higher high and higher low which is a health sign and precisely moving in a rising channel. The overall structure looks positive for Nifty and can move higher from this levels. Nifty resisted to 5950 for many trading sessions and opened with a gap up, thus crossing the important level of 5950. Now 5950 followed by 5840 will act as an crucial support for Nifty to achieve 6150 level. Again minor supports are  placed at 5980 levels which can be utilized as a stop loss for intraday trading. Nifty opened with gap up for consecutive 2 days and moved in a sideways direction in the entire day. This was previously happened in April 2011 where Nifty opened with a gap up twice and moved up more than 500 points. Moving Averages  20 EMA and 50 SMA is positively poised  as 20 EMA is still above 50 SMA. Momentum Indicator RSI has exhibited negative divergence and we are cautiously positive for Nifty. Any m

JPYINR is negatively poised as it moving in a down ward sloping channel. The currency pair is forming lower high and lower low from November 2012. Prices were hovering near the resistance of upper trend line of falling channel on Friday. It opened negative after facing the resistance and made a low of 63.60 level. As per wave perspective, prices are moving in a double zigzag pattern (a-b-c-x-a-b-c). Currently prices are moving lower in the form of wave c. In short, our bias for JPYINR continues to be negative as far as prices are moving in a downward sloping channel.

USDINR: USDINR in daily charts has closed near the high of the previous day around 55. For further positive confirmation USDINR need to close above 55.13 for further upmove. Currently it is moving in a sideways direction within a stiff range of 55-54.20. A close above 55.13 will breach the resistance of 50% of the retracement of the previous upmove (57-54.20) which will push prices to 55.30 levels which is 61.8% of the retracement. The scenario is different as compared to previous month in this pair as wave counts are very tricky and we have to rely on basic technical tools and support levels. In short, our bias for USDINR is still positive as far as 54.20 is intact. Expect this currency pair to move upto 55.30 in coming trading sesions. GBPINR GBPINR has rallied in a positive direction and broke the range of 88.50-87 on the upside. Now as far 88.70 is intact expect an upside for this pair.  GBPINR is hovering near the previous top of 89.65. Currently pr