10 Feb 2017

RETAIL RESEARCH
Weekly Technical Report

Weekly Technical Report
A chart speaks one thousand words

“Minor Correction on Cards on fall below 8715”

Technical Research Analyst: Gajendra Prabu
E-Mail: (gajendra.prabu@hdfcsec.com)

RETAIL RESEARCH P age |1

RETAIL RESEARCH Nifty [CMP-8793.55] RETAIL RESEARCH P age |2 .

 Overall traders can maintain neutral stance as long as index trades below 8883 and on a fall below 8715 maintain negative stance till 8480 – 8370 levels. so to confirm the end of rising leg we are now moving with 2-4 trendline which is nearby. The 38.  The index has started showing minor weakness. Earlier the rise from 6825 to 8968 has five wave advance but we labeled as a-b-c-d-e as we had not seen clear impulse in the 1st leg. RETAIL RESEARCH Observations: [Earlier Indications are in Italics & All levels are in Nifty Spot/Cash]  Week’s action formed a doji candle at the resistance zone which is bearish reversal formation. however it is also having five wave advance. on a fall below 8715 it could slide down to 8480 – 8370 levels in forthcoming weeks. Even though index closed positively compared with last week the gain don’t not have any significant strength on chart (Doji Formation).000 levels by this year end. Likewise we kept the alternate of “wave x/iv” for the cycle degree fall started from 9119. Once index bottoms out in the current fall then we could start buying again for the long term target of 10.000 mark.  As per our preferred wave count: Cycle degree “wave i” has started from 4531 level and ended at 6229.2% and 50% levels are placed around 8480 – 8370 levels.  If index breaks below 2-4 trendline (8715) then we could confirm that the current rising leg has ended and it has started to retrace the last rise. Whole week was volatile with rangebound and lack luster move. The “wave ii” has started from 6229 and ended at 5118.  Like we said last week It is highly difficult to say the exact level for top but we have a clue that index could see a minimum 300 points correction before crossing above 8883 levels. current value is placed at 8715 levels. now we have confirmed that the end of 6825 is cycle degree “wave iv” and cycle degree “wave v” is in progress in which the rise from 6825 to 8968 is major “wave i” and the fall from 8968 to 7893 is major “wave ii” now Nifty is in progress of dynamic major “wave iii”. however wait for a break of 8715 levels.  Price has been continuously forming higher tops and higher bottoms on daily chart which is a bullish continuation structure and this is a bullish dow formation.]  Index is just trading near to the 2-4 trendline. Now we are labeling that as 1-2-3-4-5 instead of a-b-c-d-e. [Overall traders can maintain neutral stance as long as index trades below 8883 and wait for the correction of minimum 300 points correction for buying opportunity. RETAIL RESEARCH P age |3 .  Index has reached the overbought zone in RSI oscillator which hints at correction on cards. This could help us to exit the longs with minimum loss and we could participate in the short side as well.  Index is rising in a channel and its lower trendline support is too low. Now we are in cycle degree “wave v” which is heading towards 10. but now again there is another five wave advance in the rising leg. so we have to assume there might be some missing wave in the 1st leg of previous rising leg. The dynamic “wave iii” has started from 5118 and ended at 9119 with a couple of extensions. The larger fall from 9119 to 6825 was cycle degree “wave iv” down. In simple terms. however the pattern could get validated when index break below 8715 levels. As long as index trades above this level it could continuously form higher tops and higher bottoms but it may not move above 8883 levels.

RETAIL RESEARCH P age |4 . we could see a short term correction.  The rise from 7893 to 8461 is “wave i” and the fall from 8461 to 8327 is “wave ii” then the rise from 8327 to 8672 is “wave iii” and the fall from 8672 to 8537 is “wave iv”. so second major leg could be downwards before next major rising leg. Finally now we are in “wave v” which is last rising leg of the current rising segment.  If index starts correcting then it could test the golden retracement levels of 38. if it breaks then we could see some meaningful correction.  Index is just trading above the 2-4 trendline.  When the fifth wave ends.  Nifty is in the last internal rise of the first major rising leg.2% and 50% of last rise which are placed around 8480 – 8370 levels. RETAIL RESEARCH Nifty – Internals  The daily chart of Nifty shows internal count structure.

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