Nifty : EOD 14.3.2012

First things first:
1.I got initiated into EW studies by my Guru Baaluji @ Wave Rider through MMB .I have not seen him but spoken to him over phone a few times.
2.When I asked him for Guru Dakshina, he simply said that you try to educate as many people about EW as possible.
3.My initiation to EW is only 12 month old and I started writing this blog from 13/8/2011. That shows in six months time I was able to grasp its fundas.
4.My illustrations may or may not have helped anyone,but it has DEFINITELY HELPED ME to have a better grasp on the subject.
5.The sort of compliments showered on me are embarrassing as I write for the twin self-interests I mentioned above.
6.As it does not involve any rocket science, any one can do it and in a very short span of time mentioned above.

Shall update EW observations very soon.
There are a few striking aspects of the upmove from 5171-5498:

1. There were four consecutive gap-ups of which two got filled the same day and two remained unfilled.
2. Being labelled as Corrective B,this kind of swift upmove was unexpected, though zig-zags are quite swift but still this looks exceptional.
3.Because of the gap-ups,it was not possible to delineate the fractals of B(a)=5171-5419 and B(c)=5327-5498. Only saving grace was fractals of B(b)= 5419-5327 which were clearly discernible.
4.In the absence of clear cut fractals for B(c),it was left to permissible proportions to find out the ending point  of B(c).And as discussed in the Pre-open post for today,the permissible range was 5480-5537.

But is a revisit to 5498+ levels possible to end this B(c) ? Or it has already ended?

B(c) has so far done 5327-5498* and the down-move from 5498 has taken a very clear 5 wave form(=5498-5438=60)as discussed in the Intra-day trade today.
For a revisit to 5498+ levels,the down move from 5498 has to be a 3 wave form and from the end of that 3 wave form a 5 wave form has to rise up and above 5498.
A 3 wave form down from 5498 would entail following counts:
a=5498-5438=60
b=5438-5470
c=5470- down by minimum 37.2 points (i.e. 5433) as a 5 wave Impulse or 5 wave Diagonal.
On charts this Probability can be delineated in following way:

The minimum mentioned for c=5470 downwards is 5433.
What is the maximum?
Maximum is 1.617*a(=5498-5438=60)=97=5373.
Thus my conclusion is that till we go below 5373, a top at 5498 would not be confirmed.
So all shorts to keep a Trailing Stop-loss(TSL) which currently is at 5470.1

Raghu

Trading Nifty on 14.3.2012

Yesterday,Piyush asked:
Q
for subwave 3 frm 5327

'5417+16=5433 so minimum done'
how did u calculate this
UnQ

Let me reproduce the concerned Chart:

As there was a gap up,fractals for sw3 were not possible.
But I had mentioned in my post the following forms of Impulses as they appear in real market( in addition to the theoretical 5 sub wave Impulse & 5 subwave diagonal)

Whenever there is a gap-up or down,the Impulse gets completed in following way:

Now if you co-relate , you will find the real-time chart pattern resembling the 3rd form shown above where the gap-up Impulse is ending with a Diagonal where sw1<sw3<sw5.
These are my observations and I am trying to fine-tune them.So reject them if you donot find them useful.


Now lets come to today's trades:
Pre-open:
Where do we stand?

The B we are currently in,can retrace 80% of A=5629-5171=458=367+5171=5537.
This B has fanned out as a zig-zag abc wherein so far:
B(a)=5171-5419=248
B(b)=5419-5327=92(37%)
B(c)=5327-5437* has to to minimum 5480(=0.62*A)


Thus broadly B shall end up in between 5480-5537.


How we have opened:
Minimum Target met. As per ones conviction,one can try to catch the top and start taking short positions with Stop-loss at 5541.

Let's observe which of the two options gets followed:

And the verdict seems to be in favour of a revisit above day's high. And that would be th point of taking positional shorts.

11.20 AM

11.52 AM

That means B is over and C has started for its journey below 5171.
Best of luck. SL for shorts at 5498 now.

12.27 PM

1.30 PM
Best time to short

2.30 PM

2.55 PM

3.10 PM

EOD:
Formation of a very clear 5 wave down from day's high at 5498 to 5438 is the first indication of top formation for wave B at 5498.
Corrective to this 5498-5438 has also been played out as a 3 wave form 5438-5470.
Now to me minimum 5425 is assured. If we test 5370 tomorrow then that would confirm the top at 5498.
Shall discuss other probabilities in my EOD post


Raghu

Trading Nifty on 13.3.2012

Pre-open:
As mentioned in yesterday's EOD post, 5410 is the minimum level to be tested.
The pattern that develops while this target is getting reached, would give us the clue to further moves.
9.14

Till 5422 is breached,going below 5327 remains a possibility.
9.36 AM

And what does that mean?
That means minimum 5480 before 5327 to the down is breached.

11.00AM
Let me put the broader perspective in place:

And this B(c) has a minimum target of 5480 as a 5 wave Impulse or a 5 wave Diagonal
It started from 5327 upwards so lets concentrate on this section( from 5327 upwards)

2.36 PM

sorry wrong calculation.
5417+16=5433 so minimum done.

EOD:
Last leg up remains.
Target 5480---
Nothing much to write about.

Raghu

Nifty: EOD 12.3.2012

Sometime back,my friend Shriramoka had discussed with me the 5LEMA and 5HEMA factors. While on Hourly charts(for Intra-day trades),during the current Corrective phase, I didnot find 5Hr.LEMA and 5 Hr.HEMA very useful.But on Daily charts, 5 Day LEMA and 5 Day HEMA have shown a great utility for positional trades,exemplified by the following chart where during the upmove 5day LEMA was not breached (on closing basis)and during the current downmove  5day HEMA was not breached on closing basis.

And that way,even today Nifty has closed below 5day HEMA.Which means upmove not yet confirmed.

Prior to this (rather even today--as old habbits die hard),I used only 5day & 9 day EMA and that gave equally impressive results(if not better):

And here the thumb-rule that two closings above 5day EMA confirm end of downmove and the 5/9 EMA x-over further affirms it.

And combined with EW these readings become sort of blessings from Goddess Lakshmi.

Lets go deeper into the B from 5171 upwards :
B(a)=5171-5419=248
B(b) in progress :

However,the common thing about both the probabilities is their DIRECTION IS SIMILAR( though destinations differ).
So even conservatively, i.e. going by Probability 2, sw2 would retrace 90%-138% of sw1(=5419-5327=92) giving us a target of 5410-5454.
Raghu

Trading Nifty on 12.3.2012

Pre-open:
Reproducing the chart outlining the expected pattern in coming weeks:

And it is the highlighted 3 wave pattern in the chart that I am alluding to:
Let me call it ABC and we are currently in A of this  3 wave pattern.

Now where this A started from 5171 upwards would end?


Let me try to answer it.
And the answer can be found in the types of Impulses that we usually encounter:

As the A under discussion is a gap-up,it resembles the fourth of the figures shown above.

by the above calculation, 161*0.617=99; we should not cross 5400(5300+99) as A.
Most probable Targets for A being:
0.382*161=61=5361
0.5*161=80=5380


And then B downwards to retrace this A


How have we opened?


Another gap-up.But I would not advise going long at the outset now.
As expected,immediate slide down has begun.
Thus A=5171-5420=249
B to retrace minimum 38.2%=95 points as a 3 wave form
So 5325 would be on board today.

10.00AM


For those interested in 5HrLEMA/HEMA

All those holding short positions should get out in 5320-5340 range.

And therefore A=5171-5420 has to be accepted as an Impulse.

30 sec chart for academically inclined

11.25 AM
A minor relabelling which sets minimum for down move slightly more down:

Catch the bottom:

12.00 N

Now the confirmation of downmove to be over would come with a tick above 5347.15.
Conservatives can go long that point in time with Stop Loss at day's low.
Aggressive traders should try to catch bottom at 5315 but as one would understand,no stop loss for them.


12.35 PM

1.10 PM
Trailing stop loss at 5333 for longs

If the TSL at 5333 is hit then upto what level can it go down?
Not below 5310:

For those who wish to keep track of 5HrLEMA/HEMA

2.57 PM
My Preferred count:

B(b) has to retrace 90% of B(a)(=5419-5327=92)=83 so its target is minimum5410
As a 3 wave form of which Ist is nearing completion at 5375
Did not fo 5375 and stopped at 5370.75.
3.15 PM

EOD:
While A=5171-5419=248 got completed
Its retracement B, capable of retracing 38-80% ,having done the minimum retracement ,is still not over and looks capable of going down further.But the form chosen by it is complex and may actually test 5410+ levels before going further below 5327.
Not prudent to say anything more at this juncture.


Raghu