Market Analysis With Megh Mody

Nifty made life time high of 8627 levels in the month of December 2014 and thereafter it moved down till 7960 levels, thus eroding 7.73% from the highs. The index then gave a technical bounce and retraced 80% of the previous down move making a lower high at 8445 levels. Today the index snapped 6 day rally and thus gave a reversal bar at the top. A gap down move on the following day will open negative possibilities which can drag prices lower till its previous bottom. RSI has also bounced from the level of 30 and can now resume its down trend. According to wave theory, after marking a high of 8627 levels, prices came down in a corrective pattern and completed wave a, followed by 3 wave structure and completed wave b. Now there is one more leg on the downside which is wave c. According to the projection, wave c can move down till 61.8%n of wave a &b which comes to 8050 levels, breach of this level will then force prices to test the pivot low of 7960 levels. In short, Nifty is i

From the daily chart, DAX is moving in a lower high and a lower low formation and precisely in a down ward sloping channel. This is a negative formation and can make this index slip down to lower levels. Momentum indicator RSI has also reversed from the level of 70 (overbought) and will now test the level of 30 over can even go lower. As per wave theory, the index is moving in an irregular flat pattern (a-b-c), is now moving in a last leg of this pattern which is wave c. Wave c is impulsive in nature and can also be corrective (ending diagonal). Wave c has 5 legs in it and currently it is moving in wave iii.  In an irregular flat pattern prices tend to test the end of wave a or can even go below it. The target of this pattern comes to 8400 levels. In short, German DAX is expected to test the level of 8400 levels in near term and the bias remains firmly negative.

Reliance Infra after making a top of 819 in the month of October 2014, started moving in a negative direction. The stock is moving by breaching its previous lows which opens negative possibilities. Prices made a pivot high in the month of November 2014 and resumed it downtrend by breaking the low of 542 levels, thus clearly indicating that the trend is firmly negative. Momentum indicator RSI has also relieved from the oversold zone and can probably resume its downtrend. As per Wave theory, Prices are moving in a corrective pattern (a-b-c), where it is currently moving in a wave c pattern which is impulsive in nature. In wave c it has completed wave 1,2 and 3 and it has probably completed wave 4 in the form of triangle. It can now start its last leg which is wave 5 on the downside dragging prices lower till 450 levels. In short, Reliance infra can move down to test the level of 450 as far as the level of 515 is protected on upside. Daily Chart of Reliance Infra

USDINR has been moving in a rising channel, forming a higher highs and higher lows which is a positive formation. Currently it is quoting near the support of the channel and can move up to test its previous highs. The momentum indicator RSI remains above the level of 50 which is a healthy sign. As far as the channel is intact the bias remains positive. As per wave theory, the entire up move from May 2014 till date is been corrective in nature. At present it has completed double corrective pattern (a-b-c-x-a-b-c). The probability is higher as the double corrective pattern can be converted to triple corrective pattern (a-b-c-x-a-b-c-x-a-b-c). If it does then the pair can move up till 62.00 levels or even higher till 62.15. However, if the channel is broken then it has completed double correction pattern and will start the next leg on downside which can test at least till 50% retracement of the previous up move from 58.20 to 62.00 levels which comes to 60.11 levels. In short, a

EURINR is moving down after making a high of 92.33 in the month of August 2013. We have shown you the next possible move for EURINR in our Elliott wave segment. From the below chart, prices is moving in a double corrective pattern, wave a was an impulse wave in which wave v was truncated followed by wave b which got completed at 86.78 in the month of January 2014, wave c was in a expanding diagonal pattern and was completed at 79.52 in the month of May 2014 and then it moved up and has completed wave x at 82.48 in the month of August 2014. Currently it is moving down in the form of wave a of the second correction, which means more two waves are pending. The current wave a can come down till 79.41 The bias for this pair is negative as it can test its previous pivot low of 79.41 in coming trading sessions.

Paris CAC 40 has started its downtrend, as it is now moving down in a falling red channel, breaching previous lows but unable to cross its previous high which is a negative sign. After moving precisely in an upward sloping blue channel, prices eventually has given a bearish break thus accelerating selling pressure. From June 2012 till June 2014 prices has been moving in this channel, but now it is quoting below it which is the first negative sign. As per Wave theory, prices has completed triple correction pattern (a-b-c-x-a-b-c-x-a-b-c) and it has started its down move. The current fall seems to be impulsive and will move down steeply. Any rise in this index need to be utilized as a selling opportunity. In short, the bias for CAC 40 is firmly negative, expect this index to move down below 4000 levels in coming month or so. .

In our previous update as on 13th May 2014 we were expecting Hang Seng to move above 24000 which it did after crossing 24000 on 25th July 2014. The below paragraph was written on 13th May 2014 "Hang Seng was losing its gains after a significant up move from 21137 to 23224. The fall from 23224 to 21680 was a double correction pattern (a-b-c-x-a-b-c), prior to this fall the up move from 21137 to 23224 was a impulsive up move which we have counted wave i (marked on daily chart). Wave ii will be corrective in nature and it seems that wave ii got completed at 21680 levels as it has arrived till 76.2% retracement of the previous up move (21137-23224). Now Hang Seng will start picking up momentum and can move up till 24000 levels which is more than 100% of the previous wave i. This up move will start wave 3 which is strongest, longest and broadest. In short, our bias for Hang Seng is firmly positive as it can move up till 24000 levels in coming weeks." Anticipated on 13