Nifty on 07-08-2012

Elliot Wave Pattern:

Trendline Resistance:

Hourly Momentum:
Small divergence noticed in Hour charts RSI-14:
Nifty top-5291.25(RSI-14=69.45)-at 11.00 hrs
Nifty top -5293.15(RSI-14=69.34)-at 15.00 hrs

And on the basis these three, the most logical trade for me would be to short with a SL at 5314.
Why 5314?
Ya=5154.25-5246.3=92.05
Yb=5246.3-5164.8=81.5
Yc can be max 1.618xYa=149=5164.8+148.95=5313.75

And a look at the most talked about stock of yesterday----RELIANCE

10.35 AM
As per hourly  L/H calculations, the EW counts mentioned above have become invalid with breach of 5214.
However,as a confirmation,I would wait for an Hourly close at 11.00AM to confirm this invalidation.

11.05 AM
Time for me to be out of action--- shall be on the sidelines to understand the new pattern.However,I have not yet let go off my shorts as I expect the trendline to act as a resistance and overbot Hourly will force a dip--that would be the best time to off load shorts.
EW counts,though,have been invalidated. 
Came out of shorts--- as the two trendlines resistance have been broken.

11.34 AM
A dip had to come---but only when I let my shorts go---
I still believe the Hourly overbot have to cool off before making further upmove--- and this cool off in what manner and upto what point I cannot say now as my EW counts have been thrown into dustbin---

12.10 PM
Today morning,premarket,I had given three reasons for shorting:
EW wise--count has got invalidated.
Trendline--has been breached(currently we are into 4th Hour candle above that trendline.
Divergence in Hour chart--non-existent in today's fresh highs.

So on all three parameters shorts are ruled out.
Then should we go long---?
I would give myself some more time before answering that--
In my trading style--though not infallible as demonstrated many times including today-- buying at break-outs is not preferred. Instead  I prefer to buy at supports when Hourly is oversold and similarly I prefer to sell at resistance where Hourly is overbot.
So I am not attempting to go long--
1.26 PM
Looking for next trendline resistance,daily charts show that he trendline from the two tops--6339-5630 is very close, somewhere around 5360

And that gives me my fresh labels:

And the following channel may indicate beginning of 4th subwave of (v) to take us to 5280 again:

2.36 PM
This is how ideally the fractals of (v)--an extended (v)--should take place

But notice that there has been no divergence negative divergence vis-a-vis RSI so far.
So it is more likely that we would straight-away hit 5360-5365 where the Trendline joining previous two tops at 6339-5630 is currently running.

And in the chart above,please donot miss the Price-RSI divergence---Nifty has gone above previous high of 5348 but RSI has not breached its previous high.
3.05 PM
5 min charts indicating negative divergence:

EOD:
Close to a very Important trendline--- but the correct time to create shorts --my indication being a negative divergence on Hourly charts--did not appear today--- EW wise,would like to delve deeper one of the Probabilities now is a Leading Diagonal from 4770--
4770-5124=354
5124-5017=107
5017-5348=331
5348-5033=315
5033-5350*=317

And as per this Probability we should not go above 5364---somewhere the above mentioned TL is running presently.

In view of Trendline,upside looks limited now---
But no negative divergence appeared on Hour chart today. Tomorrow we may go above 5350 again and if RSI fails to make a new high,that should be the point to short, with a tenative Stop-loss at 5365( going by above EW probability).
With these thoughts I would close today's diary.

Raghu