Indices
Tuesday, May 14, 2013
INDICES:
(MISSING WAVE-Z???):
BULLS STRIKES BACK AGAIN:
But nifty only Index surpassed the high of JAN-2013 that raises doubt in my mind about this count & possibility of wave-Z UP is still pending??
Doubts from wave count perspective. (Bullish Possibility)
1. If Wave-C was wedge & end of distribution then it would not have retraced 100% as case of Nifty in today’s situation unless it’s exceptional case. It raises doubt that still there is distribution process is going on & TOP has not formed in main Indices. I have seen only one exceptional case of 1988-89 phase of sensex as per chart attached at which wedge fall retraced almost 100% but it was in Bull market so tough to conclude at this levels of market.
2. If we see quarterly charts of nifty then there is possibility of wave-Z up still pending & this structure will alien with 1993-2001 Indian bear market (i.e. - Triple TOP formation) as per chart attached.
It will unfold in 3wave structure as per earlier waves (chart attached). In that case, if we already completed wave-A (1st wave) at the high of 6114.55 levels on 11.05.2013. Weekly negative close below it will confirm the same from wave count perspective, then we are in wave-B (2nd wave) correction & eventually final Wave-C UP will unfold.
Momentum indicators of higher time frame (i.e. weekly & monthly) are in BUY mode & Suggesting strong Uptrend from medium term perspective & its not going to deteriorate immediately.
(Bearish observation):
Nifty & sensex is moving at higher levels with selected Stocks of these Indices. These recent rally is mainly lead by FMCG, Pvt Sector Banks, Auto, Pharma etc. Even Other stocks of these broader Indices like- PSU, Metals, Capital Goods is still underperforming that’s indicating market is getting narrowed at each cycles. Even Other Indices like- BSE Midcap, BSE Smallcap, NSE Midcap etc that reflects 2nd line stocks only retraced 38.2% to50% range and remained underperformer in the broader market. It’s being written by me many times by me on daily market outlooks column.
Though Nifty has surpassed the high of Jan-2013 but other Indices are still underperforming that creates Inter market Indices divergence. Many people asking to me that Is it a beginning of fresh BULL Market?? but Still overall market is not healthy that reflects in 2nd line stocks & supporting Bearish wave Count & view as per market Outlook column at current structure of market. This is also reflecting in the charts of these indices attached here with.
Conclusion:
By looking these facts, both bullish & bearish wave count can possible. If we ignore Nifty then still bearish count is possible & if we ignore rest then bullish count is open. So we are not able to reach conclusion or consensus at current level by looking only wave count. Medium term momentum is very strong suggesting Bullish Trend as mentioned above so it’s advisable to be with momentum till its reverses.
Strategy wise:
Be with winner or performing stocks rather than looser in this bear market rally. Don’t think some stocks are available at CHEAP valuation & esp. of Midcap/Small cap segments unless you are sure in buying decision for Investment perspective because we are in such a market in which “CHEAP may CHEAT”.
Medium term outlook remains positive till nifty/Sensex trades above 5650/18700 levels respectively for both & One can expect higher levels targets of 6300-6350 range in nifty & 21000-21200 in sensex, will review further as trend established at either of side.
These Count valid till nifty & sensex closed below lows of April-2012 i.e. - 5477.22 & 18144.22 levels but one should follow medium term reversal levels for trading perspective as per market outlook.
Trading Tips:
Elliot Wave count is an art of forecasting Market trend but one need to watch out other supportive things as well to arrive final conclusion & accurate decision.
But one thing I would like to say that we are trading in very TOUGH market. If your timing & Selection of picks are right then only you can get benefit of trend at either of side & one can earn money because as mentioned above market is getting narrowed or selective at each cycles. On the other end, if you can protect your earned wealth in this kind of market then also its big achievement.
Trading is a Test of patience in such kind of market. One has to be emotionally balance to derive accurate decisions in such kind market & remember the popular saying “SLOW & STEADY WINS THE RACE”