Nifty EOD-26-07-2012

So my  morning's observations that:
Q
if Nifty goes below 5057,then this downmove would no longer remain a 3 wave form and shall have to be labelled:
sw1=5348-5218=130
sw2=5218-5267=49
sw3=5267-5055*=212(163% of sw1) extended rd wave of a 5 wave form
sw4=to retrace this sw3 by 50% or more i.e. go upto5160 again.

This particular Probability is being mentioned primarily because of two factors:
1. RSI not being in oversold zone in daily charts
2.Time taken by the downmove from 5348 is not much.
UnQ


proved correct and the downmove from 5348 has to be now labelled as A of ABC corrective(called C2)in play. To make the perspective clearer let me again repeat the previous episodes:

Thus C1=4770-5348=578(3 wave form)

C2(also to play out as a 3 wave form ABC whose A is in play as a 5 wave Impulse with an extended subwave(iii) in following manner:

(i)=5348-5218=130

(ii)=5218-5267=49

(iii)=5267-5033*=234[180% of (i)]

Now I believe that this (iii)would have ended today---for two reasons--

1.Positive divergence between RSI and Price--

2.Fractals of this(iii) are quite discernible and can be seen as:

5267-5169=98

5169-5257=88

5257-5077=180(184%)

5077-5127=50

5127-5033*=94

thus making a picture perfect 5 wave form--though this last subwave can do more(upto 1.6x98=157)--so any further downslide should be used to go long with stop-loss at the 5127-157=4970 point.

In view of the deeply oversold Hourly indicaters,positive divergence and picture perfect 5 wave form for subwave(iii)--I expect Friday to take us into green territory for 2-3 days as subwave(iv) of A.

To repeat:

 (i)=5348-5218=130

(ii)=5218-5267=49

(iii)=5267-5033*=234[180% of (i)]

(iv) to start now and as (ii) had retraced only 38%of (i)--and also the deep oversold position of many Nifty stocks--I expect (iv) to retrace minimum 50% of (iii) i.e.115 odd points

so 5160---here we come again

Raghu