13 Jan 2017

Weekly Technical Report

Weekly Technical Report
A chart speaks one thousand words

“Kissed the Second Target”

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



As per our preferred count Cycle degree “wave iii/C” has ended at 238.8% projection levels of “wave a&b” which is placed at 8480.  There is strong support placed at 8340. Watch out the Gap resistance in the band of 8460 to 8510 levels.8% of the last rise or index could give up and move all the way to 7893 levels (Because we said earlier index is in upward retracement not a fresh rally). And now we are in progress of “wave x” which has started from 6825 level. The dynamic “wave iii/C” started from 5118 and ended at 9119 with a couple of extensions. so if bulls give up then we could see sharp decline before the next rise.  The current rise is a zigzag (three wave) so the next fall could move below 61. In this “wave a” has started from 8336 to 7714. if index closes below this level then we could see little deeper correction towards 8100 levels.  Overall traders can maintain positive bias as long as index trades above 8340 levels for the target of 8550. On a close below 8340 turn to negative for the target of 8100 levels with the stoploss of 8460 or high of the week whichever is higher at the time of breakdown. The cycle degree “wave i/A” started from 4531 level and ended at 6229 and “wave ii/B” started from 6229 and ended at 5118. our upside third target of 8550 is open. The last falling leg “wave c” has started from 7979 ended at 6825 with minor “wave i & iv” overlap. index has been forming zigzag pattern from the low of 7893. At this point we don’t know whether expected upward retracement has ended in this leg itself or index is forming a larger flat pattern (in this case index could slide down to 8100 then again one more up to 8550 or higher).  Index has formed a higher top formation in weekly chart which is beginning of bullish continuation structure but on daily charts index has been forming higher top and higher bottoms which has already confirmed bullish continuation formation. we need more price development to confirm.8550 levels respectively.2% projection level of “wave i/A & wave ii/B”.2%. Traders can maintain positive bias for the upside targets of 8300 – 8450 .8% levels are placed at 8300 – 8450 .6% of “wave a” (This is extremely rare scenario) and “wave c” has almost tested the 61.The three wave upward rise from 7940 to 8655 is marked as major “wave b” and the major “wave c” has started from 8655 ended at 7539. The internal “wave b” was not even 23. Then the 2nd corrective has started from 8336. And now index is in progress of cycle degree “wave iv/X” down. However as long as index trades above this level. This a-b-c is 1st corrective and the rise from 7539 to 8336 is marked as “wave x”.  Like we discussed earlier. [Index has started to retrace (upward) the last fall started from 8978 to 7983.  Bulls took a halt for a day around 200 day EMA then it jumped above the 200 Day EMA and is trading above it which is a positive sign for bulls. the golden retracement levels of 38.]  Index moved up without any significant correction. The rise from 7714 to 7979 is “wave b”. 50% and 61.  As per our preferred wave count: Decline from the high of 9119 to 7940 is marked as major “wave a” . We were expecting this rise in second half of the week but index breached the channel setup on Wednesday which has cancelled out the minor downward retracement.8550 levels in next couple of weeks. RETAIL RESEARCH Observations: [Earlier Indications are in Italics & All levels are in Nifty Spot/Cash]  Week’s action formed a strong bull candle with good volumes which indicates bulls are strongly continuing their momentum. RETAIL RESEARCH P age |3 .  Index has attained our second target of 8450 without providing significant downward retracement. The “wave x” is a rising wedge pattern.

The rise from 7983 to 8306 is an impulse marked as “wave a”.  From the low of 7893 index has been forming a zigzag pattern which is a three wave pattern i.  The small fall from 8306 to 8227 is market as “wave b”.e. a-b-c. RETAIL RESEARCH P age |4 . RETAIL RESEARCH Nifty – Internals  The daily chart of Nifty shows internal count structure.  Index has retraced 50% of the last major falling leg.  A five wave advance has ended at 8306. The current rise from 8227 is “wave c” which is still in progress.

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