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]

February 08, 2010

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Explanatory Note: 

The retracement was very poor for the Sensex and smart for the BSE small cap. Visually the Sensex looks like a complete 5 wave decline. Here one has to hazard a guess on whether we keep extending or a wave II retracement of 50-61.8% can happen. Above 16250 a larger retracement is possible, below 15725 extentions are on for larger downside targets. Whats the preferred view? Looking at the broader indices like the small cap the trend down does not look mature enough for a larger bouce, same with commodities and currencies that I have been watching so asset markets are not ready for a larger bounce unless some darker forces are at work. 

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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

THE VALUE WAVE : What are the inflection points in the process of market expansion and contraction in the wave context. How does it happen and what relevance does it have with the stock selection process in terms of psychology. This is how long term stocks and economic trends can be forecast using Elliott Wave analysis.

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.

SHORT TERM COUNT 

What is 16250? A 61.8% retracement of wave i of V, and the falling trendline from the 18 Jan high. Both converge near this point. A failure below this level to below 15725 would indicate that the downside momentum is gathering speed and would take us to below 15300 in one go. 14684 and 13219 would become the potential targets with small bounces along the way. For those who want to anticipate a move to 16800-17000 in the coming 2-3 days need the index to go above this level else its not happening.

MEDIUM TERM COUNT 

Some like to pin their hopes on a 200dma which can coincide with the 40wema. Currently at 15661 its a short term support that often can act as a meaningful medium term bottom. However this time round wave structure and the rising downside momentum both are not favorable of a halt here unless proven. The downward momentum shown above [inverted roc], when it crossed above zero it gives the sharpest of moves. However if there is a halt here it would be for wave II upto the 20wma at 16857 after which the 40wema would eventually break in wave III.

LONG TERM COUNT 

An engulfing bear on the monthly charts! Candle patterns have worked pretty well on monthly charts for several years and it should mean a medium term top is in place that will hold till March. The previous swing low of 15330 should be the final one bulls will try to hand onto however my bet based on the chart structure is that it will break before we get a bottom worth talking about. My targets remain near the 61.8% level for the entire 9 month rally. However I have been discussing the long term count on the multi year charts and the impact the K-cycle will have on India. I will discuss the targets based on that as more evidence shows up, but what it means is that Long term investment is at risk and its best to liquidate and remain in cash till clarity emerges on the longer term. What I mean longer term is 2-3 years. If you cant take a view that long on earnings and market direction cash, and even better cash hedged against currency depreciation is the best. If you can do it hedge your savings by buying dollars or any other appreciating currency [like the yen].

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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.'