23 Dec 2016

RETAIL RESEARCH
Weekly Technical Report

Weekly Technical Report
A chart speaks one thousand words

“First Target Almost Attained”
“Cover shorts and wait for break of 7916 to create fresh shorts; in the meanwhile a large
bullish alternate is visible”

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

RETAIL RESEARCH P age |1

75] RETAIL RESEARCH P age |2 . RETAIL RESEARCH Nifty [CMP-7985.

8350 levels.  In case index breaks below 7916 then we could see more downside towards 7650 which is our second target and the fall will be sharp in nature.  As long as index stays above 7916 there could be a one more rise towards 8275 or 8350 before the next falling leg to 7650. At this point this view may seem doubtful but wave wise it has few good validations to rely on it. Make note “wave c” down is unfolding which will be sharp in nature. The rise from 7714 to 7979 is “wave 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. earlier we projected the rise could halt around 8250 or 8350 and then index could fall down… the same is happening so far. And now index is in progress of cycle degree “wave iv/X” down.  As per our preferred wave count: Decline from the high of 9119 to 7940 is marked as major “wave a” .  Make note we have been maintaining negative stance from 8140 levels and so far captured around 200 points.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. RETAIL RESEARCH Observations: [Earlier Indications are in Italics & All levels are in Nifty Spot/Cash]  Week’s action formed a bear candle with reasonable volumes which indicates bears are in momentum.8% retracement levels last major rise. Regular reader may know we have been writing about this fall from long time. In this “wave a” has started from 8336 to 7714. The “wave x” is a rising wedge pattern. And now we are in progress of “wave x” which has started from 6825 level.]  Now we are maintaining neutral stance as long as index does not break 7916 because of one reliable bullish alternate wave count is clearly visible (See page no 4). RETAIL RESEARCH P age |3 . This a-b-c is 1st corrective and the rise from 7539 to 8336 is marked as “wave x”. higher top and higher bottom formation has cancelled out (Bullish dow formation).  Technical structure wise index has formed a lower bottom by breaking the low of 8056 and the last hope for bulls i. Midcap index almost tested the low witnessed on Nov 21. There is mild Intermarket positive divergence between Nifty and BSE Midcap index. Then the 2nd corrective has started from 8336.2% projection level of “wave i/A & wave ii/B”. As per our preferred count Cycle degree “wave iii/C” has ended at 238.  Even though index has fallen down the internals of last fall is not clearly supporting big bearish stance. index almost attained our first downside target of 7916 low made was 7942 just 20 odd points’ short. The last falling leg “wave c” has started from 7979 ended at 6825 with minor “wave i & iv” overlap.  As we said earlier. The dynamic “wave iii/C” started from 5118 and ended at 9119 with a couple of extensions. If index has started “wave c” downwards then we could see sharp declines immediately or in next couple of days for the target of 7916 and 7650 levels.e. last week’s bearish Harami pattern played out well and pushed down the index this week to 7942. a break below 7916 will show the clarity. 2016 but Nifty is still above that low. If index breaks below 7916 then turn negative for the target of 7650 which is 61. [It seems like the earlier said bounce has ended at 8274 levels. If the next rise halts below 8275 then it will be a lower top and will confirm larger bearish continuation formation.  In either case the medium term view on index is weak and it is in the larger downward retracement of the last major rise started from 6825 to 8968.  Overall traders can maintain neutral or mildly positive bias as long as index trades above 7916 for the upside target of 8275 .

 As per preferred: index is directly sliding down towards 7650 levels in this “wave c” down which is in progress.  As per alternate “wave c of b” is unfolding. RETAIL RESEARCH Nifty – Internals  The daily chart of Nifty shows that index has two alternates in the internal wave structure  Red color labels are preferred wave count and orange ones are alternate counts. (For clearer picture see page no 5). RETAIL RESEARCH P age |4 .

RETAIL RESEARCH Nifty – Preferred Nifty – Alternate  As per the above chart. RETAIL RESEARCH P age |5 .7650.  The upward retracement from the low of 7916 to 8274 is marked as “wave b”.  Now index is in progress of “wave c” down towards 7916 . the fall from 8598 to 7916 is marked as “wave a”. 7916 almost done.  The upward rise from 7916 to 8250 not the 8724 is marked as “wave a of b”.  And “wave c of b” unfolds for the target of 8250 . the fall from 8598 to 7916 is marked as “wave a”.  As per the above chart.8350 levels or higher where major “wave b” could end and a dynamic “wave c” down could begin for the target of 7650 levels. First target of  The fall from 8250 to current levels is “Wave b of b” with irregular b inside.

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