07 Jan 2017

RETAIL RESEARCH
Weekly Technical Report

Weekly Technical Report
A chart speaks one thousand words

“Bulls Horn Hits and Tears the First Target”

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

RETAIL RESEARCH P age |1

RETAIL RESEARCH Nifty [CMP-8243.80] RETAIL RESEARCH P age |2 .

This a-b-c is 1st corrective and the rise from 7539 to 8336 is marked as “wave x”. RETAIL RESEARCH Observations: [Earlier Indications are in Italics & All levels are in Nifty Spot/Cash]  Week’s action formed a spinning top candle which indicates tug of war between bulls and bears to lead their direction.  As discussed earlier the truncated (failure) “wave c” has pushed the index sharply up and provided a faster upward retracement (Faster retracements could occur in first and last moves. The last falling leg “wave c” has started from 7979 ended at 6825 with minor “wave i & iv” overlap. As we said index is moving in line with our expectations. Then the 2nd corrective has started from 8336. The rise from 7714 to 7979 is “wave b”. The dynamic “wave iii/C” started from 5118 and ended at 9119 with a couple of extensions. Why we are highly relying on “wave b” instead of “wave ii”? Answer in coming weeks. This indicates next fall will halt above 7893 and i. will be a retracement fall before the next rise. And now index is in progress of cycle degree “wave iv/X” down.  The 200 day EMA is resisting the bulls so we may see some selloff in the first half of the week (see page no 5).8550 levels respectively. so book partial profit and buy again in the dips for our second and third target of 8450 – 8550 levels. trend reversal and stoploss for the larger bullish view is placed at 8000 levels. we also clearly stated that “At this point this view it may seem doubtful but wave wise it has few good validations to rely on it”.We are expecting index is forming zigzag pattern (a-b-c).  As per our preferred wave count: Decline from the high of 9119 to 7940 is marked as major “wave a” . so index could slide in the first half of the week. On daily charts index has formed a “Dark Cloud Cover” candle pattern which is bearish reversal pattern.  In line with our expectations index has attained our 1st extended target of 8300 . The “wave x” is a rising wedge pattern.  Index has formed a higher top formation which is beginning bullish continuation structure. RETAIL RESEARCH P age |3 . As per our preferred count Cycle degree “wave iii/C” has ended at 238.  The rise from 7893 to 8307 has completed five wave advance which is an impulse. In this “wave a” has started from 8336 to 7714.8550 levels in forthcoming weeks.8% level. Key support.2%. so next fall could halt above 8051 which is 61. so that index could form a higher bottom which is clear “Bullish Dow” formation.8% retracement levels. In simple terms buy the dips as more upside room is left for bulls. And now we are in progress of “wave x” which has started from 6825 level. next fall will halt above 7893.high made was 8307.8% levels are placed at 8300 – 8450 . This “Dark Cloud Cover” candle pattern is not clear by its visibility but price character is meeting the requirement (see page no 5). In zigzag “wave b” should not retrace more than 61. the golden retracement levels of 38. Traders can maintain positive bias for the upside targets of 8300 – 8450 .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. [Index has started to retrace (upward) the last fall started from 8978 to 7983. if it is does then it is not “wave b” but “wave ii”. here first move up) which means the fall from 8275 to 7893 has taken 11 days but the same fall has retraced 100% upward in 8 days.e. 50% and 61.  Overall traders can maintain mildly negative till 8150 – 8100 levels in near term and turn positive from there for the upside targets of 8450 .8350 when market was falling.]  Two weeks back we had mentioned about this rise to 8275 .2% projection level of “wave i/A & wave ii/B”. The cycle degree “wave i/A” started from 4531 level and ended at 6229 and “wave ii/B” started from 6229 and ended at 5118.8550 levels in next couple of weeks. Now index is showing some minor weakness on daily charts.

 First.8% retracement levels. index facing resistance from the falling channel setup.  From the low of 7893 index has been forming a zigzag pattern which is a three wave pattern i.  Technically we have two triggers to validate that index has started “wave b” down. a-b-c. Technically index is in retracement fall before the next rise.e. RETAIL RESEARCH P age |4 .2% retracement level and is showing weakness. so it is clear that index has stared “wave b” down. The rise from 7983 to 8306 is an impulse marked as “wave a”.  A five wave advance has ended at 8306.  Index kissed 38.  Now index is set for minor correction towards 8150 – 8100 which could be “wave b” and it may not move below 8051 which is 61. RETAIL RESEARCH Nifty – Internals  The daily chart of Nifty shows how “failure c” has pushed an index.

 Here this requirement is meeting perfectly. a  Few weeks back the same has been witnessed around 8274 levels. RETAIL RESEARCH P age |5 . RETAIL RESEARCH Nifty – Dark Cloud Cover Candle pattern Nifty – 200 Day EMA  The above chart shows the dark cloud cover (DC) pattern formed on daily  The above chart shows that 200 Day EMA is resisting the bulls around 8300 chart which is a bearish reversal. bear candle should open above and cover and close below the previous bull candle’s more than 61.  Just by seeing it may not looks like DC pattern but the price requirement i.8% of it. levels.e.

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