INDIACHARTS tnt

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: ' 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. MORE ABOUT ME  Visit my video blog on Elliott and Cycles at http://www.youtube.com/indiacharts

You can receive Socionomics The Science and History of Social Prediction 2 Book Set - Rs 1320 instead of $59 by Mailing to rohitms@yahoo.com

TECHNICAL FORECAST AND MARKET POSITION FOR INDIA [SENSEX]

July 06, 2009

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Explanatory Note: 

Mid week it almost appeared like wave c down had started, however till 14736 holds we could see more upside first. Longer term the monthly lower close is an initial indication that a medium term top is in place already.

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OTHER MARKET SEGMENTS

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.

Dow-n Again : Wave 4 rally is over and wave 5 to new lows can begin.

INTEL-igence : Big stocks like INTEL give clues about the wave structure.

Gold is Bold : A 5th wave in rupee gold coincides with a double top in dollar gold.

Buying the dollar : The dollar index is completed 61.8% retracement and wave 3 up should start.

Silver lining : Wave B has retraced 61.8% and C down can start.

SHORT TERM COUNT 

The intra week drop to 14355 has led to a higher top and bottom formation from the 14016 low. This followed by a close above the 20dma at 14736, makes the short term trend continue to look positive. I was earlier expecting wave b to retrace 61.8% up to 15002, but with this formation I would not be surprised by a spike to retrace 78.6% up to 15272, close to the upper Bollinger band.

MEDIUM TERM COUNT 

The 15579 Aug'08 high acted as a resistance once. We have had two positive weeks since then. A second attempt at that level would probably end up seeing an upside breakout. The lower monthly close has made that the lower probability event. But in case we do see it then the 61.78% retracement of the previous bear market at 16063 would be the immediate target. However once both 14736 and 14355 are broken then we would clearly be into wave c down with a target closer to 13100. Right now the index is not clearly confirming either case.

LONG TERM COUNT 

Having pushed through the 12800 neckline its tempting to think wave (2) is over and (3) started. The right shoulder of the previous H&S at 15579 is a good decider level as the last lower top. If that is the case the target is simple (1)=(3) at 62000 for 8-12 years[1.618x(1)=97000, so EWIs target of 100000, much publicized, is simple fibonacci and not off the rocks]. So when the upside potential is so high what is the hurry here? Its very important to rule out the alternative X so that such upside can be played with great confidence. The risk of the current rally being an X wave at larger degree is that it would at some stage come right back to test its previous lows over 12 months. Further more the wave count risk that 2008 was wave 5 of a 30 year bull market and that means retracement into the wave 4 area of lower degree [i.e. below 6000]. Both are extreme out comes and therefore we have to be positioned for the right one. The 8020 lows holding is currently favoring the bullish outcome but we need more confirmation. A simple wave 2 retracement/consolidation would do it too. Till then enjoy the party till it lasts.

TO JOIN a mailing list for articles and updates from the author on Elliott Wave and the Indian stock markets rohitms@yahoo.com 

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.'