NIFTY CLOSED WELL BELOW 4365 YESTERDAY AND WITH THIS INTERMEDIATE TERM DOWN TREND STARTED. WITH THE BEGINING OF INTERMEDIATE TERM DOWN TREND 1ST IMPULSIVE WAVE WHICH STARTED ON 06-03-2009 FROM 2539 HAS BEEN COMPLETED AND BEGINING OF 'A' CORRECTIVE WAVE FROM 4689 HAS BEEN CONFIRMED. ACCORDING TO DOW THEORY INTERMEDIATE TERM TREND MAY LAST FROM 3 WEEKS TO 3 MONTHS. TOP OF ONGOING RALLY WAS MADE ON 10-06-2009 AND FROM THAT DATE MINIMUM 3 WEEKS TIME THIS CORRECTIVE RALLY WILL TAKE TO CROSS HEIGHTEST OF THIS RALLY. 1ST IMPULSIVE WAVE GAINED 2150 NIFTY POINTS AND 2ND IMPULSIVE WAVE(3RD WAVE) WILL ALSO GAIN MINIMUM 2150 POINTS FROM THAT POINT WHERE ONGOING 1ST CORRECTIVE WAVE(2ND WAVE) WILL FINISH AND 2ND IMPULSIVE WAVE(3RD WAVE) WILL START. I AM TELLING IT VERY MUCH WELL IN ADVANCE THEREFORE GRAB INVESTMENT OPPORTUNITY AFTER CONFIRMATION OF 2ND IMPULSIVE WAVE(3RD WAVE) BEGINING.
'A' CORRECTIVE WAVE IS ON AND NIFTY HAS ALREADY RETRACED ALMOST 23.6% AND COUNTERED YESTERDAY STRONG SUPPORT RANGE OF 4200-4250. IF NIFTY MOVE ABOVE FROM YESTERDAY LOWS THEN 'B' CORRECTIVE (THIS WILL BE UPWARD WAVE) WILL START AND AFTER ITS TERMINATION 'C' CORRECTIVE WAVE(THIS WILL BE DOWNWARD WAVE) WILL BEGIN.'C' WAVE SHOULD ALSO RETRACE MINIMUM THE RETRACEMENT POINTS OF 'A' WAVE. IFNIFTY MOVES BELOW 4200 THEN DEEPER CORRECTION WILL BE SEEN.BELOW 4200 NEXT SUPPORT IS AT 4100. THIS FACT SHOULD ALSO BE KEPT IN MIND THAT IT IS THE NATURE OF CORRECTIVE RALLY THAT THEY TENDS TO TEST 50 DMA WHICH IS NOW AT 3928.
I CLEARLY TOLD YESTERDAY AND REPEATING IT AGAIN TODAY THAT 'THERE IS GOOD SELLING AT HIGHER LEVELS THEREFORE VERY GOOD CONSOLIDATION REQUIRES FOR ANY UPMOVE FROM HERE". UNTIL CORRECTION DOES NOT COMPLETE AND FRESH UPMOVE DOES NOT START AFTER COMPLETION OF CORRECTION TILL THEN INVESTMENT SHOULD NOT BE DONE. AS I PERCEIVED THIS CORRECTION MUCH EARLIER THEREFORE I STOPPED TO GIVE INVESTMENT CALLS IN INVESTMENTS AND PORTFOLIOS MANAGEMENT THREAD. INDIAN MARKETS ARE SLIDING AND AFTER CONFIRMATION OF INTERMEDIATE TREND TOWARD DOWNWAD SIDE WAIT FOR BEGINING OF FRESH UPMOVE AND THEN THINK FOR INVESTMENT.
1- MACD HAS CROSSED DOWNWAD AVERAGE LINE THEREFORE CONFIRMING SETTLING OF DOWN MOVE.
2- FAST AND SLOW STOCHASTIC HAVE MOVED INTO OVERSOLD ZONE THEREFORE INDICATING ONLY A SMALL UPMOVE.
3- ROC AND RSI ARE MOVING INTO NEGATIVE ZONE AFTER SHOWING CLEAR DIVERGENCE IN OVERBOUGHT AREA THEREFORE INDICATING WEAKNESS.
NIFTY TRADED LAST 2 HOURS YESTERDAY WITHIN THE RANGE OF 4230-4280. IF NIFTY SUSTAINS ABOVE 4280 THEN ONLY SMALL RECOVERY CAN BE EXPECTED.AS 4200-4250 IS STRONG SUPPORT THEREFORE IF NIFTY SUSTAINS ABOVE IT THEN THAT WILL ONLY TELL FOR BEGINING OF 'B' CORRECTIVE WAVE AND THAT WILL NOT MEAN THAT FRESH UPMOVE STARTED AFTER COMPLETION OF CORRECTION. FOR CORRECTION COMPLETION MORE EVIDENCES ARE REQUIRED.ALTHOUGH LITTLE UPMOVE IS EXPECTED AFTER POSITIVE OPENING BUT IF NIFTY DOES NOT SUSTAINS ABOVE 4250 THEN RED CLOSING WILL BE SEEN TODAY AND MORE DOWN MOVES IN COMING WEEK.
(LALIT KUMAR DHINGRA)
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