PRE-OPEN MARKET OUTLOOK(05-05-2009)

FIRSTLY INDIAN MARKETS CONSOLIDATED 5 MONTHS AND AFTER THAT UP SIDE BREAK OUT CONFIRMED AN UPMOVE UPTO 200 DMA AND YESTERDAY CROSSING 200 DMA WITH HUGE GAP CONFIRMED THAT INDIAN MARKETS HAVE ENTERED INTO BULL PHASE AND YESTERDAY TRADING GAP(3480-3600) WILL ALWAYS GIVE SUPPORT TO INDIAN MARKETS AND FOR FILLING IT COMPLETE SELLING PATTERNS ARE REQUIRED AND UNTIL THAT WILL NOT HAPPEN TILL THEN YESTERDAY TRADING RANGE (3600-3660) WILL NOT BE BROKEN DOWN.ONGOING RALLY HAS SHOWN THIS CHARACTER THAT BEFORE ANY SHARP UPMOVE IT COMPLETED ITS CORRECTION IN ALMOST 100 POINTS RANGE IN A RANGE BOUND MOVE.FIRSTLY IT HAPPENED NEAR 2600 AND AFTER THAT NEAR 3000 AND IN LAST NEAR 3400.IT HAS ALSO BEEN OBSERVED THAT NIFTY HAS GIVEN ALMOST 400 POINTS MOVE AFTER EVERY RANGE BOUND CONSOLIDATION.ACCODING TO THIS TREND 3800 SEEMS POSSIBLE.

MARCH RALLY HAS COMPLETED 2 SHORT TERM CORRECTIONS IN RANGE BOUND MOVES AND IN THIS MANNER 4 WAVES HAVE BEEN COMPLETED AND 5 TH WAVE IS ON.5TH WAVE TARGET SHOULD BE:-

1- EITHER RETRACEMENT LEVEL(61.8% OR 76.4%) OF 5TH WAVE OF 2008 CORRECTIVE WAVE OR
2- 161.8% OR 261.8% OF 4TH CORRECTIVE RALLY OF MARCH 2009(3297 TO 3511 BETWEEN 16-04-09 AND 22-04-09)

1- MACD- MACD LINE HAS STARTED TO MOVE UP ARTER TAKING SUPPORT AT AVERAGE LINE AND TUS GIVING MORE UPMOVE SIGNAL.
2- SLOW AND FAST STOCHASTIC;- MOVING NEAR OVERBOUGHT ZONE BUT THEY HAVE TENDENCY OF REMAINING IN OVERBOUGHT ZONE FOR LONG TIME.
3- ROC GOT SUPPORT AT EQUALIBRIUM POINT(0) AND STARTED TO MOVE UP.THUS FURTHER UP MOVE IS ON.
4- RSI HAS AGAIN ENTERED INTO OVERBOUGHT ZONE AND SHOWING STRENGTH.

AS PER ELLIOT WAVE THERRY 5TH WAVE CAN NOT BE MORE THAN 3RD WAVE LONG THEREFORE AS PER THEOTY ONGOING 5TH WAVE TARGET IS AS FOLLOWS:-

3511(16-04) - 2962(30-03) = 549(3RD WAVE) + 3297(LOWEST OF 4TH WAVE) = 3842(MAXIMUM LENGH OF 5 TH WAVE)

AT PRESENT 5TH WAVE IS GOING ON OF THE MARCH 2009 RALLY (EXPECTED 1ST WAVE OF BULL RALLY) AND THIS WHOLE RALLY WILL BE CORRECTED IN THE SHAPE OF INTERMEDIATE CORRECTION AFTER THE COMPLETION OF ONGOING 5TH WAVE AND IT IS EXPECTED THAT INTERMEDIATE CORRECTION SHOULD START NEAR ABOUT 3842 AND AFTER THE COMPLETION OF THAT CORRECTION NEW (2ND) WAVE WILL START.AT THIS MOMENT 2 THINGS MUST BE KEPT IN MIND THAT:-

1- CORRECTION WILL START AFTER COMPLETION OF SELLING PATTERNS IN INTRADAY AND DAILY CHARTS.THEREFORE UNTIL SELLING PATTERNS ARE NOT COMPLETE SELLING SHOULD NOT BE DONE.
2- IF INDIAN MARKETS SUSTAINES ABOVE 200 DMA AFTER THE CORRECTION THEN INVESTMENT CAN BE DONE AFTER COMPLETION OF CORRECTION BECAUSE THAT WILL CONFIRM 2ND WAVE BULL RALLY AND THAT RALLY WILL BE MORE THAT 1000 NIFTY POINTS.

SOME PROFIT IS EXPECTED BUT YESTERDAY INTRADAY CHARTS ARE SHOWING BUYING PATTERNS AND AFTER SOME VOLTALITY UPTREND WILL REMIAN CONTINUED.AS SENTIMENT IS HEATED THEREFORE INTRADAY AND VERY SHORT TERM BUYING SHOULD BE DONE AFTER INTRADAY CORRECTION.AFTER FLAT OPENING UPTREND AND GREEN CLOSING WILL REMAIN CONTINUED EITHER FROM TODAY OR FROM TOMORROW.


(LALIT KUMAR DHINGRA)