May 032011
 

On 2nd January, we discussed the bearish implication of a move below 6069, and that move took us down nicely to under 5200.
The rally from 5177 was described as an ‘X’ wave separating two sets of three-wave downmoves. We had a bit of trouble deciding how high the ‘X’ wave wll travel, but suggested that any close below 5600 will confirm a top. This close has happened today. We should now look to use any recoveries to sell for a move down to 4800.

  79 Responses to “NSEI 4800, here we come.”

  1. thanks for your Updated. Second Corrective wave A Currently running . It is correct one sir .I think Wave A finished between 5340 to 5500 .

    warm regards
    Swaminathan

  2. Sir,
    BIG FAN of your theories, the incidents of yesterday have rather left quite of us wondering on whats next for the small investors, a move to 4800 would rather move India also in a state of depression. I certainly hope an upmove is in the cards but what level ? if the markets dont break 5530-40 levels should we hold 5950 as a strong resistance ? in simple how high could we expect the markets to move in the short term before this huge dip !
    Your help to all young investors is highy appreciated – thank you.
    Gaurav

    • Gaurav, The warning signs were posted several times that it is not safe to be holding on to Indian stocks at these lofty levels. Any recovery to the resistance line marked in the chart should be used to exit longs. It doesn’t matter if that resistance breaks. Investors and traders should prefer to take low-risk positions, and there will be many such opportunities later on. Good luck.

  3. Ramki,
    If i understand you correctly, you are suggesting that 5700 is a good level to go short now with a stop around 5950 levels. secondly, If we fall as much as we did last time we will go to 4800. If we fall 1.618 times that we go to 4000. How do we take a call at 4800 if we are headed for a larger correction ?
    Pankaj

    • Pankaj, I didn’t speak of turning short in the blog. However, a short term trader can sell on any direct recovery to 5690 with a stop at 5800 for now. Should the rally happen after going below 5350, then we will rethink the levels. As for the 2nd question, I am quite happy for now with a move to around 1.4800. We will discuss the markets again when we get there.

  4. Sir,
    Amazing yet very simple post. Your charts say it all.

    Regards,
    Muthu

  5. dear Mr. Ramki,

    your blogs are very educative and help small investors in understanding “why the markets behave in a particualar way”?
    With reference to your comments about nifty dipping to 5000 or below, does this indicate a start of mulit year bear phase in the market??

    • HI Pravin, This is not the beginning of any long-term bear phase in Nifty. On the contrary, this dip should be used to start building a portfolio of stocks for the long term given the growth story for India.

  6. Dear Ramki,

    I happened to go through your 5th wave extension post bcos of the silver post. Couple of questions here wrt to Nifty. Given that Nifty’s 5thwave extended during 2007-8, would you consider the move from oct 08 lows to Nov10 high as the 2nd retracement? Nifty did not cross the high of Jan08. If so, would Nifty go back to the lows of 2008? The reason I’m asking is to know after 5th wave extension, do waves “tend” to doubly retrace or “must” doubly retrace?

    Thanks in advance,
    BJ

    • Hello BJ, I liked your question. If you had read all the posts on extended fifth waves in WaveTimes, as well as the Silver update, you would have gathered that the 2nd retracement is a tendency only, and while we should be ready for it and act suitably if seen, there is no compulsion for it to unfold. In fact, in Silver, we came straight down and reached the Wave2 of the extended 5th today (the low was 33.16 and bounced back as anticpated. As for Nifty, I believe the correction was over back then, and the rally to the recent 6338 highs is part of a new impulse wave.

  7. I guess almost everyone is pacing themselves for a big fall but i guess they are in for a surprise.We will fall but not much and bounce back again.The markets are not going anywhere in the next two months and will be rangebound frustrating both perma bulls and bears alike.I definitely dont see nifty falling to 4800 in the next 4-5 months.

    • Hi Niraj, thanks for your comment, but readers will appreciate it more if you included some technical or fundamental reasons for your views. Cheers.

  8. Sir, As it was given the target for wave ‘Y’ is around 4800. Can you please mention the expected levels for ‘A’ ‘B’ and ‘C’ under ‘Y’ wave…….

    • Vijay, Wave analysis is a work-in-progress. We will have to dynamically deal with the markets as it unfolds. There is no way of anticipating all the sub-waves at one go, especially in a correction.

  9. Sir As this is progressing ‘Y’ i want to ask you is it possible for wave Y to be directly subdivided into 1,2,3,4,5 not in abc

    • Abhinav, I dont remember labelling any wave as ‘Y’. Anyway, if this is coming down as a double zig-zag, yes, we will see a 5-3-5 pattern again.

  10. Dear Ramki,
    I am new to your blog but i find it very knowledgeable and helpful to learn Elliot. I am specially interested to track Nifty as per Elliot projections. I read all your comments posted earlier and the latest one on May 3rd was quite interesting.
    From last 2-3 sessions Nifty has stalled its decline around 5541-5551 which was marked as last Support line by you. though the support line was breached last week but it regained and crossed it and now decided to sit tight on the support line itself. Is this a normal phenomenon i.e breaching will show some kind of immediate recovery for couple of sessions before actually falling to the expected levels. In other words should the trader (taking cues from such support lines) wait for immediate recovery after the breach and then build a short position if he/she wants to go with the trend. Will love to have your comments and guidance in such cases. Thank you in anticipation.

  11. Hi Naveen, welcome aboard! The support line was just one more clue. If you study Elliott Wave Principle, you will see that there are specific ways to use lines, typically to draw channels. In my illustration that support line is not part of wave analysis! Remember our aim is to make sensible trading/investing decisions. If we were to sell now, your stops should be placed at 5700, and that is too far for my comfort.

  12. Hello Ramki,
    Nifty touched 5476 today and closed at 5486 down 78 points. if it falls further, as believed by many, what can be the most probable shape of the next corrective. I am more eager to learn that based on the existing principels of Elliott can we atleast anticipate the falling structure. Please excuse me for my ignorance but as far as I can understand from your illustration and what ever knowldge I have on the subject the current fall seems to be a complex corrective with an ‘X’. the part prior to ‘X’ seems to be ‘zigzag’ correction. So is it now possilble to see some probable structure emerging post ‘X’. Further should we consider X to be already over here or is it still developing and how to decide that. My sincere apologies if my query seems silly but want to learn the maximum I can from you.
    Thank you in anticipation. Regards.

    • Hello Naveen, Thank you for your comment. Unfortunately I am not in a position to teach Elliott Wave analysis remotely. This is mainly because of my busy schedule. I suggest you read a good book and use the various posts in this blog as live examples. Real time analysis of the markets is a lot more challenging than text book examples because the latter only presents the ideal cases! Good luck. Ramki

  13. Dear Ramki,
    I saw one of your videos where you discuss BankNifty, DLF , Tata steel etc. Your software seems to be much easier to use than MetaStock. Which software are you using and which software would you advice us to use?
    Thank you once again
    Gaurav

    • Hi Gaurav, For Elliott Wave analysis you dont need anything sophiticated. Just the ability to draw trendlines, and fibonacci grids. You would have noticed that is all I use in my charts too. The rest is all screen capture and commentary. To answer your question, I use Metastock charts available in Reuters.

  14. sir, i want to know if TATAMOTORS has completed an extended 5WAVE?
    THANKS

    • Henmin, Yes, I do think that Tatamotors has completed an extended 5th wave and hence we should see this stock suffer broad selling donw to atleast 980. However, I urge you not to get carried away and short the stock too soon. Any break below 1130 now will probably confirm top, giving you some 12-13% even after that. If it gets back to the prior top first, then that will be a great level to sell…

      • Hi Ramki Sir,
        did you mean that if tata motors close below 1130 than it comes 980? and what is stop loss for that?
        please reply me

        • Prithvi, Since Tata Motors was a stock I wrote about earlier, I will answer this question. There is no doubt that we will see Tata Motors trade down to 980 area sometime later this year. Yesterday the stock made a low of 1112 and today it has not carried down. Besides, the downmove is not ‘clean’ from an Elliott Wave perspective. These are warning signs. While I would definitely not buy Tata Motors until we see 980, I would be careful about where to sell. Maybe a recovery to 1185 with a stop at 1230? But that is still only an idea as of now.

          • Sir,
            In Nifty i see head and shoulder pattern ,and as per pattern the target is comes 4500-4300. Is my pattern and target is right?
            The chart says big fall ,is it possible?

          • Prithvi, I dont see any head and shoulder’s pattern in Nifty. Most beginners identify patterns that they want to see, not what actually exists. Having said that, the only way to learn is to try and spot patterns! Good luck.

  15. Sir,

    Just happened to come on your blog, and it is really a wealth of information here. Thanks for sharing this so openly. Appreciate your efforts.

    In your post on Oil, you have analyzed oil to correct to 71 USD, and in this article you are expecting Nifty to correct to 4800. Though both seems to be following the path predicted, but are fundamentally opposite in nature for Indian market and so i am puzzled. If oil (and other commodities) corrects, Indian markets should do better, in’t it? Can you please share your thoughts on this?

    Thanks

    • Sir,
      Which is the best technical tools for share market for medium to long term investment?

      • Prithvi, There is no such thing as the best tool. Anything that works for you is good. The problem with most traders and investors is they think technical analysis is the holy grail to get rich. We should always remember that it is one of the various components of being successful in the markets.

  16. Thakre, thanks for your comments. Although there could be an inverse relationship between the Indian equity markets and the commodity markets, (something I cannot confirm or deny) it is also true that each market follows it’s own cycle.

    • Dear Ramki Sir,
      is it is good time to short tatamotors ,TCS and Nifty??
      Please Reply

      • Hi Prithvi, Thanks for your question. Such trading advice would require me to spend a lot of time on the charts, something that I am unable to do just now. Good luck!

  17. Sir, Since the ‘X’ top, the slide continued and now market is at 5360. No recovery happened. If recovery happens, can we keep the same strategy to sell at 5690 with SL 5800. As you said the levels will get changed if the recovery starts from below 5350 leves, this is in anticipation that market won’t go below 5350 before recovering the fall from ‘X’ top to 5360.
    Thanking you for ur valuable guidance…

  18. Hi Vijay, On 5th May the low was 5443, then on 13th May the high was 5605. That was a recovery to sell into. The current decline could well be an “A” wave of a second set of ABC. If this were true, you will get a recovery after a 5-wave downmove is completed. Use that to exit stale longs.

  19. Dear Ramki Sir,
    I just came across this blog and wanted your opinion on this. Please care to take a few seconds of your precious time and give your advice.
    xxxx.blogspot.com/2011/05/xxxx.html
    xxxxxxx.blogspot.com/

    Regards,
    Ashish

  20. Are we forming an ending diagonal pattern in nifty ?

    • Pankaj, what time frame are you looking at?

      • In daily chart itself I also found ending diagonal i think at 5330 Nifty complete Wave A of another zigzag now wave B and then wave C Wave B could target 5550 to 5650 area. Sir what is ur opinion. Also, Sir pls check there is head and shoulder in nifty weekly chart breakdown at 5330 for tgt of 4600 and below

      • (A) I am looking at 30min charts in google finance. Counting may-18 low (5401) as 1, may-20 high (5517) as 2, may-25 low (5328) as 3 and may 26 high (5426) as 4. What does this ending diagonal imply ? Can we have ending diagonals in wave A ?
        (B) I agree with the Head and shoulder pattern on nifty but it is not complete yet. It did not break 5300 this and we know a failed pattern can be dangerous. It needs to break neckline 5300 for a shoulder target for 4700-4800. But the head target is 4000. so i think if the HnS materializes which it has not done yet…then we go down to 4800…then come back and test neckline in 5200-5300 area and then go back to 4000. Critical thing is a break of 5300 as of now it has not taken place.

        • Hi Pankaj, an ending diagonal triangle in the 5th wave position warns us to expect a sharp correction back to the start of the triangle. However, the 30-minute charts that I am able to see in my system have too many spikes and bad data, and I am not able to deal with that in any convincing manner. Secondly, looking at such short time frames is for day traders, and most readers of Wavetimes are looking at longer time frames I believe! Finally, you have posted some comments about head and shoulders pattern in the Nifty. As stated earlier, I dont see any head and shoulder top in this index at present.

  21. Nice to see your blog. Loved to see work from a pure R.N.Ellittician.

  22. Sir nifty has reached 5489 after making a fresh low of 5329. How much further upside is there in this wave ?Sir it seems like tht USD ll be stronger against INR. Waiting for ur view abt it very eagerly.

  23. Hi Ramki,
    I have a specific question on titan. It looked as if it had completed the 5th wave. 4th wave bottom around 3000 was at golden mean levels. It also came down in 5 waves after that(movement was also swift)..how ever it went up and made a new high ? Is my counting wrong ? …how to avoid such traps?

  24. Pankaj, Either you were misled by spikes, or you tried picking tops. The end point of a move is not confirmed until it stops there and turns around. I won’t be surprised if Titan continues to stay well bid for some more time. By the way, I am afraid that it won’t be possible to discuss all the individual charts that readers of this blog ask about for obvious reasons. So please bear that in mind when you post questions.

  25. Dear Ramki,
    Nifty closed 5560 . Keeping in mind 50 dme = 5575 , 200 dme=5604 and previous high = 5605 .A close above these levels will be case to go long for levels 5800 (again 76.4% at work). Another interesting fact is options are very cheap. “5500 put @ 80 (expiry june) and 5500 put @ 120 (expiry july)” . Low risk entries for bears.

    Vidhan Dugar

  26. Ramki ji,

    The last downleg from 5944 to 5328 was 616 points, comparable to 645 points down A leg from 6335 to 5690. This downleg took 33 trading days as against 14 for the one from 6335 top. Are we going to mimic the earlier ABC move, just that this one will be slower?

  27. Hi Ramki,
    Read somewhere that we cannot have 2 zig-zags in a correction. If the first one is a zig-zag the next one is a flat/triangle. Is this true?

    • Pankaj, when the correction is complex just about anything can happen. There are some guidelines about alternation but these are not rules.

  28. Hi Sir,
    i am new to elliot wave analysis, i would require your advice to start learning this techique. Various websites mark the wave count differently this confuse me a lot. Please suggest good books and tool to do better wave analysis.

    Thanks,
    Meena

    • Welcome aboard, Meena. As a first step, I would recommend that you stop reading too many sites for the same stock/index/currency. You are bound to get confusing wave counts, and would make your learning difficult, Stick with any one, not necessarily wavetimes. If that analyst is any good, he will point out where the counts become murky, and where it is clear. A standard book is Prechters.

  29. Hello Ramki
    Any views on BSE Small Cap Index.
    Thanks
    Ranjit

  30. Dear Ramki Sir,
    As per your Wave Chart for TCS ,Now down move contd…
    and also in Cairn India and nifty down move contd…
    Now can i add more short now in these stock??

    • Prithvi, While TCS stays below 1117, it will keep going down. Any pullback near this resistance will be a good low risk trade as you have have closeby stops. In Cairn Idia, the resistance comes near 320. Good luck

  31. dear ramki,
    please give latest update about nifty.
    thanks in advance

    • Hello Dr.Jignesh, I think we are in the final stages of the A wave of a second set of ABC. But given the heightened pessimism in the market (how quickly the sentiment has changed!!) we might see any rallies evaporate quite quickly. So the best way is to sell rallies, and take profits when you see a good move. Let us not wait for 4800 directly. It will probably come a few days later. IN the meantime, use pullbacks to 5350 and 5420 to sell for quick short term trades, DOnt be scared if it goes past your sell level. It will come back in a day or two! Good luck

  32. Hello Mr. Ramki. Just wanted to know if your views on ABB of going up still holds? Secondly, identified ending diagonal triangles in one high priced stocks – GlaxoSmithkline and the other one being Titan Industries, which has been split today. Also would like to know your take on Oracle Financial Services and whole host of Sugar stocks, especially Bajaj Hindustan and Balrampur Chinni?

    • Hi Ganesh,
      Afraid I won’t be able to look at all those stocks as I have a fulltime job. But I am sure other readers would appreciate your pointing out these developments (eg Diag triangle etc).

  33. Hi,

    Just wanna know that as per my reading we are in a correction mode with wave A & B have completed & we are in C wave. As i can see probably this is 3rd of C running and the minimum Tgt for C would be High of Wave B i.e. 5944.45 – length of Wave A i.e(6335.9-5177) 1158.9 and the TGt would be around 4800. Just wanna know whether i am reading it right or Not?

    • Hello Vikash, while the way you count is not what I have described in earlier posts, it is good that you have the same targets! Why don’t you do a quick review of the old posts, and it might become clearer to you? Good luck!

  34. Sir, nifty closes @ 5484. Any changes in count as today’s upmove quite unexpected and sharp. moreover how much upside left now ?

  35. Dear Ramki Sir,

    I have been following your posts for the past few months and learnt a lot from it. I have a question regarding NIFTY count. Is there a possibility that the high made in Nov 2010 is only 3rd wave of the upmove from the lows and we are currently in 4th wave triangle ( A completed at 5177,B at 5944 and C at 5196 ). Please comment.

    Thanks,

    Pasupathi

    • Hi Pasupathi, If you have read my other posts, you will have observed that I hold the view that one can work on any count that fancies him/her, so long no rule of the Wave Principle is violated. At some point, the market will signal to you that you are on the wrong path, and you should immediately take corrective action. That is the only way to profit from Elliott Wave Principle. Incidentally, my favored count is we have finished a 5th wave at the November high.

  36. Sir, nifty closes @ 5484. Any changes in count as today’s upmove quite unexpected and sharp. moreover how much upside left now ? Why such a sharp rally in C wave ?

    • Hi Keyure, We have finished wave A of the second ABC and now in wave B. Lookout for one more decline later on as Wave C. Initial resistance lies at 5655 and then 5725

  37. sir, will you plz take look at chart of titan industries n guide us? my wave count as follows- prices took support thrice on 61.8% retrecement level of wave 0 to wave I
    making it tripple bottom, a highly bullish pattern, while completing wave II@33.3300
    wave(1 ) made high of 68.6 ,a 61.8% retrecement level of wave I to wave II.
    wave(3) is extended wave , it extended 423.6% of wave (1)n completed@212.100,
    wave (4 )made low of 147.150 a retrecement level of 38.2% distance travelled by wave (0) to wave( 3) ,
    so can we expect wave (5) to b extended wave n travel
    the equal distance travelled by wave (0 )to wave (3 ) ?
    is it titan topping out here@237? because 237 is 50%distance of wave(0) to wave(3) from wave(4) bottom?
    one more querry- which charting software do you use? because i could not get this much good fibonacci price projection n retrecement tool ,like you are using in your posts, in any charting softwares that i have ever used till date.

    • Hi Vivek, When your third wave is already extended hugely by 423%, it is unusual for the fifth wave also to be extended by such a degree and hence I would not go with your count. However, the 50% distance for wave 5 is acceptable, but I havent had the time to analyse this stock carefully.I use Reuters.

  38. Dear sir,
    Its a long time to know your view on NIFTY.
    I found one more count in nifty. Pls suggest me whether it may work or not.
    After “X” completed at 5944 there is A comprises of ABC ends at 5443 in which ‘a’ is from 5944 to 5735, then ‘b’ upto 5912 then ‘c’ upto 5443. Here “A” completes then “B” starts and still in progress taking form of expanding triangle of which ‘a’ is from 5443 to 5605, ‘b’ from 5605 to 5328, ‘c’ from 5328 to 5604.95, ‘d’ from 5604.95 to 5195 and now final ‘e’ of expanding triangle progresses should take resistance again at 5605 level. Then “C” will start which should end at 4800 which is 1.618% times of wave “A” (5944 to 5443)
    pls reply whether i am on right track???

  39. Is there a possibility of this happening, Mr. Ramki?

    Nifty seems to be completing some sort of an ending triangle, with a probable weekly close somewhere near 5177.70 (intraday low on Feb 11,2011). This sets the stage for a 3 or even a 5 wave up move which may take Nifty to new highs, close to 6400 and even 6765.

    • Hi Ganesh, As I often say, just about anything could happen in the markets. We have a paradigm, and we trade that. Along the way, we make adjustments. There is no other way to trade, unless one is doing paper-trading or armchair analysis.

  40. SIR
    PLEASE GIVE UPDATE IN NIFTY AS SOON AS POSSIBLE

  41. Dear Ramki,

    Please give your views on BankNifty whenever you can squeeze time out of your busy schedule .

    Vidhan Dugar

  42. 29.06.11 CNX BANK INDEX / BANK NIFTY was 11,100 . It has come down to 9800 level today. My Target remains 8700 levels. Please have a look and comment if you find anything interesting……Another stock IDBI cmp 107.50 has broken several crucial figures and a targets are 80 & 68…

  43. JAI HO ! NIFTY BREACHES 4800 ………..
    4800 …..ACHIEVED . It is also the 1000 dme area…… Mind blowing EW stuff in realtime……Thanks a lot

 Leave a Reply

(required)

(required)