Outlook for 14.12

As we see in the above chart , the MA bands suggested a buy towards the end of the day As the Pink signal line crossed above the 5 High ema ,and  the rally from 4730 lvls to 4820+ lvls.
In the EOD chart below the signal is not yet triggered. Tomorrow as the prices move above the low ema presently at 4810 lvls  one can looking at hourly charts also , look for a good entry to buy.

+ve Divergence was seen , in Hour chart with 9 Rsi , 14 Rsi , Fast macd today and the rally followed it .
9 Rsi moved from below 20 mark above it .

Fast Macd is yet to trigger the buy signal , I am keeping an eye on the signal line , it is very close to 0 line ,if you see it is just below it.As signal line crosses the 0 line it is considered bullish.Let us see if it crosses tomorow.

Fast Stochastic is poised as if it is just about to cross the signal line , yet another thing to keep an eye on .

Emas have a bearish allignment . Shorter term emas are lying lower than their higher term emas .

What I understand is if we see upside direction tomorw then it will confirm the MA cross over , also will support the +ve divergence and macd signal line will do zero crossover.

EOD 12/12/2011

In the above chart I have plotted simply 5 hour High MA(Blue ) , 5 hour Low MA( Black ) bands and the Pink line is the daily closing of pirces. A very simple trading strategy can be as the prices move above the blue band it is Buy signal and vise versa .



For past two trading sessions it is giving very good returns ,

today morning a sell signal was generated as the pink line crossed the black line to down .I keep updating the prices at the end of every 15 mins in my charts so that I can keep trailing my SL . One can buy min 2 lots for the max returns .

EW : We might be in the 3rd wave of C to down . looking at the implusive behaviour of the waves today.

 we can count C in 5 waves  as

1.5099-4841 =258

2.4841-4918=77

3 presently going on in 5 waves .( should travel min = 258 ====4660)

Up Or DOwn ??

9^th Dec

Update @ 2:30 pm
Gap almost filled . Island reversal gets Invalidated  .
ALso looks like a green candle  today if so , then evening star also gets invalidated.

The direction I was trying to trade was right today , that is long , but it took my stop loss at day low by just 2 points and jumped again close to 70 points and I ended up lossing .
My moving average band , Triggered a buy . ALso trendline is suggesting that the down move from  5099 to 4841 is over and now correction for this move is on.
23.6% is done today


Trade Initiated Buy at 4873 NS Sl= 4844 Day Low.
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WLema @ 4864 . Nifty opened at 4870 may take support at WLema 4864  and bounce .

EW point of view ,  we may have completed B at 5099 and started C down in 5 waves . 1^st wave over at 4843 today(9^th Dec) and now 2^nd wave to up in 3 waves as corrective wave may start .

A-     5385-4639

B-      4639-5099 (did the golden ratio and then fell from there)

C-      Ongoing in 5 waves

i-5099-4841=258

ii-4903(23.6%)   4941(38.2)   4971(50)   5001(61.8)  5045(78.6) Probabilties exists.

       49012 Done .

Bearish scenario

Candle Pattern

Nifty opened Gap down at 4870 , not filling the last gap at 4866-4918 , If we do not fill this Gap today then it creates and Island reversal , which is very Bearish . If Gap gets filled  today then gets invalidated.

Also yesterday EOD candle made an evening star  which is also bearish . Follow up is reqd. as another red candle today.

Volumes

Eod 8^th Dec Volumes below average .

Indicators ( Indicating bearishness)

Stochastic – Sell in daily TF  ;

Macd yet to trigger a sell in daily time frame , but with todays gap down it has triggered a sell .

RSI – turned down from 80 mark .

Today 's ORB – (4872-4843) As I write this Orb broken to up so possibilities that we are in C.ii to up

so the candle pattern which is suggesting movement down ....needs follow up ...

Let us see.

Time to sell?

My trading system where in I use

1)  5 hour high and 5 hour low moving averages band with closing price at the end of hour as signal , generated a sell after 3:00 pm candle .

2) The price has just come to lower channel line that you can see in the chart below , If the prices break this line , then as per my understanding we are done with 'B' and are in 'C' to down in 5 waves .This 'B' retraced the move labeled 'A' from 5400- 4639 near to the Golden Ratio at 5108 .

3) Hour slow Macd generated a sell signal .

4) Prices closed below Hour high ema at 5088 , H 5 ema 5078 and Hour low ema 5056 .

-ve Divergence was also confirmed by prices moving below the 5 ema .

Now the above analysis is only on Hour data , one has to check the daily data as well . Day High ema at 5026 still protected and then Dema at 4997 , once these get broken then nifty can drift lower.

4th wave scenario rejected

Sir says ,
Most 4th waves break the trendline briefly and then start their 5th wave. Accordingly, if you connect the 1st(5201) and 4639(suspected 3rd) and draw a parallel line from the 2nd(5317), Nifty has broken out of it 3 days ago and staying well above it. For this reason alone, the 4th wave scenario is rejected.

There are 2 possibilities:

"X" done at 5400(5382) and in the next downmove of "abc", "a" done at 4639, the "b" is on. If it exceeds 5223(80%), then the alternate view:

"X"'s abc to be read as:
a: 4720 to 5400(5382)
b: 5400 to 4639(Irregular)
c: 4639 to .....(Could clear 5223 to 5350 or 5400 & more)

Below mentioned Option 1 and Option 2 get rejected .

Nifty as I see on 3rd Dec 2011

From High of 6338 , Labeling the move to 4639 as follows
W- 6338-5177
X-  5177-5944
Y-  5944-4720
XX 4720-5400
Z (going on)

As per EW presently I see 3 options in play.


Option 1
Another zigzag in play (A, B , C) making the whole correction from 6338 a triple zz.
A going on
   1. 5400-5205=195
   2. 5205-5326 =121
   3.  5326- 4639=687
   4. 4639-5062*
Right now 4 has reached exact .618 *1 ( The golden ratio).5 should start down I feel , to complete A in 5 waves down.This 5 should be equal to 1 in time and magnitude .
Invalidation point would be to enter in the territory of wave 1 , that is to go above 5205.

Option 2

We see 3 waves presently from 5400 down ,
so it can be a flat correction too as we see 3 waves up to 5062 making it (3 3 5)
so now 5 waves to unfold DOWN.

Option 3

If we go above 5205 then probably we are in a larger flat towards 5400 . Move from 5400-4639 is a  3 wave move.