INDIACHARTS TM

INDIACHARTS is a scientific analysis of the Indian and global stock markets updated weekly using the tools of Elliott Wave theory, candlesticks, momentum cycles, sentiment indicators, moving averages and automated trading systems. TNT or the new technicians represent the approach to the use of these classical tools that has been applied here. 

ALL WAVE COUNTS ON THE FOLLOWING WEB PAGES ARE ACTUALLY COUNTED/ANALYZED MANUALLY ON CHARTS AND DO NOT INVOLVE THE USE OF ANY AUTOMATED WAVE COUNTING SOFTWARE.

Rohit Srivastava: ' Indiacharts is a free update on the markets for public reading. My views are based on my analysis of the markets after years of such analysis, since 1991. MORE ABOUT ME  Visit my video blog on Elliott and long term Cycles at http://www.youtube.com/indiacharts

TECHNICAL FORECAST AND MARKET POSITION FOR INDIA [SENSEX]

March 08, 2010

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Explanatory Note: 

Some world indices started making a new 52 week high and that has led to a lot of analysis paralysis with wave counters. After a 5 wave decline and several trendline breaks you don't expect a new high. Two strong reasons to not expect a new high right now for India are 1:-a low IV reading, as low as that seen on 18/01 before wave iii of 1 and 2:-seasonally the high made in Jan is rarely surpassed unless a larger degree wave structure emerges. Still a short trade needs a stop and we can stretch it to 78.6% retracement near 17320. Since October the market has created a resistance cluster near 17285-17350. So till this range is surpassed I think the current wave counts are still valid and should be respected. Above this range I would consider the idea that wave Z of a complex B wave did not end in Jan and is only forming now with a target of 18300. Till then we are still in a wave 2 rally before wave 3 down to new lows begins.

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OTHER MARKET SEGMENTS: These articles are posted to the mailing list and you may click on the links below to read them

Shanghai to lead : Wave III of 3 in progress down and leading along with Greece

Gold H&S : The next leg down starts. Silvers trendline break

Rupee and Technology stock : History shows no proven correlation.

Rupee Wave 3 : A falling wedge in wave C of 2 marks the final end to wave 2 and start of wave 3.

Dollar index : Wave III of 3 takes off for new highs.

Dow sits on the trendline : The arithmetic scale is working best for trendlines this time.

Sensex Fan lines : Fan lines are a classic concept for trendline users.

For more updates on other markets visit the Google group.

SHORT TERM COUNT 

An eventful week as the index stretched beyond the 61.8% level but is still short of 78.6%. In the meantime the gap at 17000-17025 was filled. Given the 5 wave decline I am still considering the rally a wave 2 rally retracing the losses of 1. If it stays above 17100 for long then it might open up the possibility of a rally to test the 17700 highs. Otherwise if it falls below 17100 it would fall back into the rising channel that encompasses the wave 2 rally which has an a-b-c structure. c appears to be ending in a triangular structure.

MEDIUM TERM COUNT 

On the weekly charts we closed above the 20wma but need to watch whether we can stay above it for another week for strength. The parabolic SAR at 17229 can often act as an end point to corrective moves and might not get crossed if the downtrend is to start. A fall below the 20wma at 16771 would indicate that the 40wema at 15869 is due to get tested. Above 17225 we would test 17280-17350 range which should be a formidable resistance.

LONG TERM COUNT 

For months I have discussed the long term count and the bearish potential risk. Now with a clear 5 wave decline in place from the Jan highs I am taking the above as my preferred count; that wave C of the bear market that started in 2008 is now forming. Since some sectors made their 5th waves only in 2009-2010 its possible for it to almost feel like a bull market in wave B. But that is the beauty of wave B's. Now I mentioned a month back that it was hard to judge if C would be a one sided 5 wave decline or split into a slow and detailed set up. The loss of speed makes it look like it will be a slow and prolonged decline with detailed retracements. Right now we are near the end of either wave 2 of C or wave 2 of 1 of C with the second case being more possible. Still its early to make these judgements, as socionomic events can speed things up sometimes.

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Rohit Srivastava: ' This is a free update on the markets for public reading. My views are based on my analysis of the markets after years of such analysis, since 1991. Investment decisions made on the above analysis would be at your own risk and I take no responsibility for your decisions based on the above analysis.'