Nifty Weekly Update for 21 Aug 2012

Nifty Weekly Update for 21 Aug 2012:

Why I am preferring the Bearish view on Nifty?

*             As per EWP, Nifty had completed the 5th wave with 5 internal wave @5417(as per LOG CHART), If we consider bearish count then also we have completed the a-b-c(w)-(x)-a-b-c(y) @5417 pattern and Thereafter price started in the down move.   (only concerned here is that another a-b-c  complex pattern can be in effect as Z wave).

*             As per Daily Chart, Price breaks the Upmove Channel and heading down, which result the weakness in the current upmove.

*             As per the Candlestick Pattern, Long Leg Doji seen on the daily chart which act as reversal of the last trend (uptrend).

*             RSI and MACD indicator showing the negative divergence which looks weakness. Price is making new high but Indicator is not breaking its previous high.

*             Stochastic Oscillator shown sell signal on overbought zone and heading lower 80%.

If nifty will go down (bearish view) then what could be the targets for the downmove?

There could be many scenario can happen like diagonal pattern, contracting triangle,  or 5 wave impulsive down move.  Currently i will consider the 5 wave downmove if price will breaks 5181 and heading lower which is lower trendline support.

We will look for this as how the prices unfold further.

If tomorrow, prices are heading upward and breaks the top 5419 then still this view is valid till 5440 and this was the major hurdle for the nifty. I will change this view only after the price crosses 5440/5450 and moving higher.

Happy Trading !!!