Dec 142010
 

Many readers are asking for the outlook for NIFTY, India’s most watched Stock index. When a huge move in one direction ends, the topping out takes a bit of time. The spotting of the end of the final fifth is usually a challenge. Who doesn’t want to know what the exact top will be? Wave analysis is beautiful AFTER THE FACT. But to come up with recommendations BEFORE the event entails the risk of being wrong. But if one waits forever for confirmation, he/she will never get to trade. The fact that NIFTY has commenced a recovery from a low that is HIGHER than the preceeding low causes one to wonder if the initial move down was still part of a complex fourth wave – after all the previous move stopped exactly at the 38.2% level! Given this not unusual dilemma, a smart trader will wait for the current recovery to run its course, and join in any selling AFTER we get an overlap of the point Q in the chart. When that happens, we will have seen an overlap of a tiny wave 1, which is not allowed if prices were still in impulse mode in. Welcome to the practice of wave analysis!! These pages are different from others because you see practical advice here. Best of luck.

  20 Responses to “Outlook for India Stock Index Nifty”

  1. Sir,

    I am a student of Elliot Wave Analysis for the last one year. Sir please help me
    by teaching me on the following.

    As per the Chart I understand that there is a possibility of market touching 6240 level and then correction may happen if correction has not taken place when market touches 6070. Sir, please confirm whether my understanding is correct.

    Also I would like to learn the analysis of current label from 5690 to 6240 in relation to Wave 3.

    I also thank you for your effort to educate people on Elliot Wave Analysis and I pray to Almighty to wish you best of things in life for the service you are rendering to people like us, who are interested to learn the Wave Theory.

  2. Sir I am counting wave for long perspective. Supercycle 1 completed in 2007 supercycle 2 in 2008 now this is supercycle 3 in which we have completed cycle 1whose top is 6338 recent top now we are in cycle 2 whose target is around 4800 38.2% retracement of 2200 to 6338. Please give your view.

    • Hi Abhinav, Those who speak in terns of super cycles seldom trade. The goal of any analysis should be to trade and profit. In the long run, everyone is right and everyone is wrong.

  3. Hi
    Ramki

    Only one question for you….. You know a lot. then how much u have made wealth from markets using Elliot wave theory…….

    Thank you
    Anil

    • Hello Aryan, Good question. To make money you need the following: (a) Risk Appetite (b) Risk Capital (c) Trading system that you will dispassionately execute (d) Full attention to the markets. Knowledge of Elliott Wave Principle is one part of point (c) above. My career as a trader stopped several years back. I make my money as a Treasury Manager. How much I have made from the market is less relevant than how much ‘CAN’ be made.

  4. Sir,

    are there any 5th wave extensions currently for any of the following stock in (INDIAN STOCK MARKET) weekly charts (1) CIPLA (2) HINDALCO (3)TATACHEMICAL (4) TATAMOTORS (5)TATASTEEL I think that these all stocks that are mentioned above come in 5th wave extensions but I am a learner so please please can you see that stocks and can you give road map to me

    thank you

  5. Hemin,

    I wish I can oblige by looking at all these stock charts. Unfortunately, I dont have time. I did look at the first one for you, CIPLA, and clearly wave 3 had extended, and the 5th wave has found resistance at the 38.2% measure of the distance travelled by waves 1-3. So there is no ‘extended 5th wave’ there.

  6. Sir,

    I use amibroker software for anaylises but elliot wave indicator is not available in these software so any software you recomded for elliot wave study other wise advance get or meta stock. Or can i add ellliot wave study in amibroker.

    • Hi Kishor, I dont use any software to count or label waves. A simple bar chart with volume indicators is usually enough. I think no software can accurately predict the market, just like no analyst, however good he is, can always predict the market. Wave analysis will allow you to understand where we are in a progression, and hence take sensible, low-risk trading deisions.

  7. Hello Ramki,
    Can you suggest some book or refence material for understanding the basics of elliot waves and the various forms of extentions??

    Regards,

    • Hi Pravin, COnsidering the huge demand for a reference material, I am thinking of writing a book myself! Will let you know when it is ready. In the meantime, suggest you get hold of Prechter’s book from a friend. Good luck.

  8. Sir

    One small doubt i am having and would be obliged if u culd correct me on the same.As per ur chart we are in 5 of Large wave V so wouldn’t it be necessary to form a new high before the eventual fall in large A-B-C pattern as 5 of V shuld be highest.Correct me if i am wrong i am too young for elliot.

    • Nitesh, (a) A normal wave 5 will make a new high, but occasionally we also get a failed 5th wave, in which case it will finish just below the prior high. (b) We still cannot be absolutely sure that the prior high was just the end of wave 3. It could have been teh end of wave 5 already. This is why I have posted both possibilities (a failure before the high, and a finish at a new high)

  9. Hi,

    today Nifty crossed your point “Q” (6069.50)

    so now if it falls below 6069.50 then selling should be done.till thats not crossed its in buy zone.is it?

    sir could you please give targets for both the possibilities.:)

    thanks

  10. Sir nifty has passed Q point. so now what should be the strategy? now any change in count?

  11. Sir,

    please please………… sir NICKEL chart with wave count

    Thanks

  12. Hi Ramki – First of all I wish to thank you! – You are fantastic!
    My best wishes for a happy New Year. A small question. I am a newbie.
    Can you explain me how to recognize a third or fifth wave, for
    instance when it is an extended third or five wave.
    For me it is difficult to understand in one chart the difference.
    Can you let me see one or some examples
    Excuse me for disturb.
    Thank you a lot and best regards

    • HI Fabrizo, Welcome to the club. I suggest that you spend time understanding the wave personalities. Look through the various examples in the blog,. Gradually, you will develop a ‘feel’ for the waves and you will be on your way. Good luck.

  13. […] trade the financial markets. I think I did 5 posts in all about the Nifty, starting with this one: Dec 14, 2010 update and then pin pointed that once we break below 6069, we are all set. See this […]

 Leave a Reply

(required)

(required)