Weekly Technical Analysis

11 March 2013 - By Vivek Patil, India's foremost expert in Elliot Wave Analysis

Top Stories of the Week Sensex fails to break Nov'12 lows, recovers 4%. Govt. clarifies TRC sufficient for claiming tax benefits on money routed from Mauritius. Additional tax on salaries over Rs.1 cr to net Rs.4400 crs for Govt. Moody's terms Budget as realistic and "credit positive". Mukesh Ambani retains richest Indian position for the 6th year in a row. Dow Jones hits new all-time high. CAG finds holes in farm loan waiver scheme. SEBI forms a panel on insider trading. Services PMI plunges to 3-month low in 'Feb. Bank borrowings at 5-month low. I-Tax dept unearths Rs.7222-cr fake hawala bills.

Post Nov'12 rally retraced by 74%, watch 61.8%-80% levels upside for "Bull Trap" [Technical readings carried forward from previous weeks are shown in italics. Readers can easily identify the new arguments which are written in regular font] Last week we discussed, Terminal should be retraced completely in 50% time 10% tolerance is allowed while applying pattern implication rules. This would provide us with some leeway Whether or not Sensex drops below Nov12, we may not regret. Sensex has already lost 1410 pts (Nifty 440 pts), about 7%, and the broader markets 15-20%. The individual stocks have lost much more than that fall from 29th Jan13 so far shows 3 waves, marked as a-b-c. Each of these consumed about 8 days Besides the similarity in time, b-wave retraced only 38.2% of a-wave These are symptomatic of a Diametric Already in its lower-degree g-leg, the c-wave could end in the coming week. Sensex completed the c-wave during the week as suspected, and that too exactly on its 8 th day as per the time requirements of the Diametric. The d-wave opened upwards thereafter, and achieved 261.8% ratio to b-wave . The Index, as a result, ended 764 pts or 4% higher for the week. While most sectors ended in Green, the Realty, Bank and Capital Goods Indexes recovered between 5 & 7%.