WEEKLY ANALYSIS FOR WEEK ENDING 4TH APRIL 2014

NIFTY HAVING BREACHED THE EARLIER CHANNEL RESISTANCE LINE AROUND 6336 SPOT WHICH TOO WAS THE HIGH OF PERFECT DOJI OF 5TH MARCH, HAS MOVED UP EXACTLY AS PER THE PREDICTIONS TO BREACH THE 6700 MARK ON FRIDAY 28TH MARCH AND IS STILL LOOKING FOR A BIT  MORE OF UP SIDE BEFORE IT CORRECTS DOWN A BIT TO RETRACE SOME OF THE 5 WAVE GAINS IT HAS MADE FROM 4TH FEBRUARY LOW OF 5933 TILL 28TH MARCH HIGH OF 6702.  ALTHOUGH NIFTY PRESENTLY IS MAKING MORE & MORE NEW LIFE TIME HIGHS & PRESENTLY  IS IN THE NO MAN’S LAND THAT GENERALLY DOES NOT ENCOURAGE SELLING BY LONG HOLDING SWING TRADERS, YET THE ELLIOTT WAVE COUNT FROM 4TH FEBRUARY LOWS OF 5933 AT LEAST GIVES A FEELING THAT THE 5 WAVE PATTERN IS EITHER COMPLETE OR IS ABOUT TO BE COMPLETED IN A DAY OR TWO FOR AN ‘ABC’ TYPE ZIGZAG CORRECTION TO RETRACE AT LEAST 38.2% OR 50% OR THE MAXIMUM OF 61.8% OF THE ENTIRE UP MOVE FROM 5933 SPOT, BEFORE THE RESUMPTION OF THE NEXT LEG OF THE MEGA BULL MARKET.

AS OF NOW, AS LONG AS NEW HIGHS WITH DAILY HIGHER HIGHS , HIGHER LOWS & HIGHER CLOSINGS ARE MADE BY NIFTY WITHOUT MAKING A LOWER HIGH FOLLOWED BY A LOWER CLOSING BELOW THE PREVIOUS DAY’S LOWS,  THE ON GOING BULL MARKET WILL CONTINUE TO MARCH HIGHER & HIGHER IRRESPECTIVE OF  WHATEVER LANGUAGE  LATE RN ELLIOTT USES TO SHOUT FROM HEAVEN TO CURSE  NIFTY. SO, IT IS WISER TO HEDGE THE LONG POSITIONS BY WRITING SOME
OUT OF THE MONEY CALLS TO POCKET THE HEFTY PREMIUM ON THE CALLS BY HOLDING ON TO THE LONG FUTURES. AS A ROUGH GUIDE AS LONG AS SPOT NIFTY DOES NOT CLOSE BELOW 6644 SPOT OR FUTURES  FOR TWO CONSECUTIVE DAYS ONE CAN KEEP ON BUYING DECLINES BY TRAILING THE STOP LOSSES UPWARDS.

AS FAR AS THE TECHNICALS ARE CONCERNED, THE DAILY TECHNICALS ALTHOUGH LOOK HIGHLY OVERBOUGHT GIVING  HOPES FOR THE BEARS, BUT ONE MUST REALIZE THAT IN ROARING BULL MARKETS THE DAILY TECHNICALS CONTINUE TO LOOK HIGHLY OVERBOUGHT. HOWEVER WITH SOME OF THE WEEKLY INDICATORS GENERATING NEGATIVE DIVERGENCES WITH THE HIGHS NIFTY MADE DURING FEBRUARY 2013, THERE COULD BE AT LEAST A PAUSE BEFORE THE NEXT MODI WAVE TAKES MARKETS UP. TRADERS & INVESTORS MUST KEEP IN MIND THAT DIVERGENCES ARE  LIKE  NAUGHTY CROOKS WHO ALTHOUGH INDICATE  THE  POSSIBILITY OF THE REVERSAL YET THESE CROOKS NEVER INDICATE WHEN WILL  THE REVERSAL START.

THE DECISIVE BREACH OF THE WEEKLY RESISTANCE LINE LAST WEEK ENDING 28TH MARCH BY CLOSING  THE STRONG  WEEKLY GREEN CANDLE FAR ABOVE THE WEEKLY RESISTANCE LINE FORMED BY JOINING WEEKLY HIGHS OF WEEKS ENDING 1ST FEB 2013, 24TH MAY & 13TH  DECEMBER IS A CLEAR INDICATION OF MAY MORE BOUTS OF UP MOVE IRRESPECTIVE OF ANY PAUSE OR CORRECTION THAT THE BEARS CAN HOPE FOR. THE INVERTED HEAD & SOLDER FORMATION MADE BY THIS WEEKLY RESISTANCE LINE AS THE NECK LINE TO THE BOTTOM OF THE HEAD AT 30TH AUGUST 2013 LOWS OF 5119 CLEARLY INDICATES A MINIMUM LEVEL OF  ANOTHER 1200 POINTS (VERTICAL DISTANCE FROM THE LOW OF 5119 TILL 6325, THE POINT ON THE WEEKLY RESISTANCE LINE  OR THE NECK LINE VERTICALLY ABOVE THE LOWEST POINT OF THE INVERTED HEAD) FROM THE LAST WEEK’S BREAK OUT LEVEL OF 6525 SPOT TOWARDS 7725 SPOT NIFTY LEVELS IN NEXT FEW MONTHS. THERE WILL BE MANY REVERSAL, PAUSES OR CORRECTIONS BUT BE ABSOLUTELY CLEAR IN YOUR MIND TO SEE AT LEAST THE WEEKLY INVERTED HEAD & SOLDER NECK LINE BREACH TARGET OF 7725 SPOT IN NEXT FEW MONTHS. SO, FOR THE MEDIUM TO LONG TERM INVESTORS, IT IS JUST ONCE IN A LIFE TIME OPPORTUNITY & PLEASE DON’T LET IT SLIP OFF   FROM YOUR HANDS. BUY & BUY THE DECLINES IF AT ALL ONE IS LUCKY ENOUGH TO FIND A WORTHY DECLINE IN THE NEAR FUTURE..