In my last post, I said that NF can take support from 2850-2920 and move upwards. For now, Nifty has probably taken the support. Monday morning can see a green opening and then another final dip 2810-2820. After opening the Nifty BTST should be booked and one whould then wait for the dip to 2820 zone. This is the zone where all shorts should be completely covered and agressive longs be initiated. I will now present my theory behind such a move.
Please observe the 3 figures as attached.....
1. Fig I (NF with complete indicators like Stochastics, MACD, Momentum and Volume and also the 2-sigma Bollinger Bands enveloping the NF daily bar charts
Please observe the 3 figures as attached.....
1. Fig I (NF with complete indicators like Stochastics, MACD, Momentum and Volume and also the 2-sigma Bollinger Bands enveloping the NF daily bar charts
http://i441.photobucket.com/albums/qq134/Saptarshi_m/Nifty%20Analysis/NiftyFut-I.png ,
2. Fig II (Enlarged NF Bar Chart with 2 distinct zones - the fall from Jan highs to Oct lows and from Oct lows till today)
2. Fig II (Enlarged NF Bar Chart with 2 distinct zones - the fall from Jan highs to Oct lows and from Oct lows till today)
http://i441.photobucket.com/albums/qq134/Saptarshi_m/Nifty%20Analysis/NiftyFut-II.png
3. Fig III (The current rally from Oct lows till today)
3. Fig III (The current rally from Oct lows till today)
Now, coming back to Fig I, current MACD shows a positive sign above the 'zero' signal line. This is a very bullish sign. The Stochastic shows oversold zone. Also the turnover volume on NF has gone down with decreasing price, which shows that the bias is definitely on the upside as compared to earlier situations when volume used to fall with every price rise and vice versa. Now see the blue colored Bollinger envelope. Currently the price has reached the mean position (middle of the 3 parallel lines) after hitting the +2 sigma. Initially the price touched -2 sigma before going up. Ideally, when all positions are favorable, price tend to move up again after touching the mean line if it is coming from higher bands. So, taking all indicators into consideration, NF is surely poised to move up again.....
Now, let focus on the Fig II and III....This is what interests me more. The Wolfe Wave analysis is done on the NF daily charts....2 situations have been considered - the past fall and the current rally.....(I should mention here that I am not an expert though on WolfeWave analysis and neither been trained by Bill Wolfe......analysis is done on my experience only....Traders should seek professional guidance before proceeding for trades)......If I consider the current price movements from point 1 to 5 (see fig), the a 5 point wave is completed. The fulcrum, if properly drawn from point 1 and passing through point 4, then the balance shows the next movement from point 5 near 2810 to straight 3550 which is the EPA(Expected Price of Arrival)....The Estimated Time of Arrival (or ETA) comes out to be around 15th Jan 2009 (+/_).....Again, the WW analysis is being clubbed with the implied volatility on Nifty....As discussed in my previous post, VIX has come down from 85 to 40 levels....This also shows stable price movements and confirms on the WW charts.
Lets see now whether WW analysis worked before or not (See fig II).....Lets consider the points ABCDE. B was the 1st dip after 22nd Jan 2008, when prices first tried to move up till C. This was the setting of the bearish Wolfe Wave and the fulcrum when drawn from A through D, estimated a price movement till point 1 (the first point of consideration for the next wave formation which was near 2250). Thus, we find that last time the prices more or less met their targets and that too amidst extreme volatile conditions......
Thus low volatility, price near the mean Bollinger band, +ve MACD and all other indiactors are showing good forward movement at the same time. The only concern is if prices start falling below 2800 technically, though I feel it should not happen....The rest of the factors like war, terrorist attacks, etc can never be gauged and so should not be kept in mind, though many people will be trying to shift people's focus on that front.
[For details of our services, please write to us at psfinancials@yahoo.in or call is at 9433071980, 9314611288....For new demat/trading accounts with the best brokerage charges, mail us your details to psfinancials@in.com and our team will send you all documents through courier services. Do write us with your suggestions and comments]
Now, let focus on the Fig II and III....This is what interests me more. The Wolfe Wave analysis is done on the NF daily charts....2 situations have been considered - the past fall and the current rally.....(I should mention here that I am not an expert though on WolfeWave analysis and neither been trained by Bill Wolfe......analysis is done on my experience only....Traders should seek professional guidance before proceeding for trades)......If I consider the current price movements from point 1 to 5 (see fig), the a 5 point wave is completed. The fulcrum, if properly drawn from point 1 and passing through point 4, then the balance shows the next movement from point 5 near 2810 to straight 3550 which is the EPA(Expected Price of Arrival)....The Estimated Time of Arrival (or ETA) comes out to be around 15th Jan 2009 (+/_).....Again, the WW analysis is being clubbed with the implied volatility on Nifty....As discussed in my previous post, VIX has come down from 85 to 40 levels....This also shows stable price movements and confirms on the WW charts.
Lets see now whether WW analysis worked before or not (See fig II).....Lets consider the points ABCDE. B was the 1st dip after 22nd Jan 2008, when prices first tried to move up till C. This was the setting of the bearish Wolfe Wave and the fulcrum when drawn from A through D, estimated a price movement till point 1 (the first point of consideration for the next wave formation which was near 2250). Thus, we find that last time the prices more or less met their targets and that too amidst extreme volatile conditions......
Thus low volatility, price near the mean Bollinger band, +ve MACD and all other indiactors are showing good forward movement at the same time. The only concern is if prices start falling below 2800 technically, though I feel it should not happen....The rest of the factors like war, terrorist attacks, etc can never be gauged and so should not be kept in mind, though many people will be trying to shift people's focus on that front.
[For details of our services, please write to us at psfinancials@yahoo.in or call is at 9433071980, 9314611288....For new demat/trading accounts with the best brokerage charges, mail us your details to psfinancials@in.com and our team will send you all documents through courier services. Do write us with your suggestions and comments]
1 comment:
Nice post.keep the good work goin.
regards
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