Dean Market Profile

Wednesday, February 29, 2012

Nifty - Elliott Wave Analysis.

Dean Market Profile Elliott Wave , Indices

Hourly EW

Nifty opened gap up today, but wore off through the day. This might give additional support to our DZZ argument. We may form the second leg of the DZZ and may target 5200 - 5100 area, to complete wave II. For this we have to stay below the high made today at 5458.60 and take out the low of 5268.35 as soon as possible.

Nifty - Elliott Wave Analysis.

Dean Market Profile Elliott Wave , Indices

Hourly EWP

Nifty rallied smartly today, but we may still be in a bigger corrective pattern. There are 3 possibilities now,
1. We completed wave [w] yesterday, and now rising in 3 waves for wave [x], only to fall down again in wave [y] to complete a DZZ correction in wave II.
2. We may be forming an irregular correction and may have started to rise wave [b] to reach the top of wave I, and then fall in a sharp wave [c] to complete wave II.
3. This possibility though I feel is less probable, but we may have completed a simple zigzag yesterday, and already started wave III up.

In simple English, we may get resisted in the 5450 - 5500 range and come down to 5200 - 5100 range. Or rise all the way to wave I top of 5630, and come down again to test the low of wave [a] at 5268.35 to complete wave [c] of II. And if we take out 5630 confidently we might be well on our way to wave III, and much higher prices in days to come.

Nifty - Elliott Wave Analysis.

Dean Market Profile Elliott Wave , Indices

Hourly EW

Hourly chart shows that we have convincingly broken the rising channel. The pullback after the break down was resisted at the lower channel line. Now classical technical analysis would call this a confirmation of the down trend. But as EWP practitioners we know that an initial 3 wave decline, may mean one of three possibilities,

1. A DZZ or TZZ correction.

2. A flat correction.

3. A triangle (but since this is wave II as per our EW count this possibility is ruled out).

So going by the first possibility we get even deeper correction, but only after completing a small pullback. And going by the second possibility we may see a rise to the high of 5630 levels in 3 waves and a sharp cut in 5 waves around the bottom of this wave (a) to complete wave (c).

Since this wave I was very sharp, we might get into a consolidation mode for a couple of weeks, before we resume the up trend. The support and resistance levels and Fibonacci levels are same as mentioned in our last post.

Nifty - Elliott Wave Analysis.

Dean Market Profile Elliott Wave , Indices

Daily Volatility

The daily chart for Nifty has Bollinger Bands applied to it. It can be seen that both the bands are quite a distance apart after the stupendous approx 25% rally. The upper and lower bands need to catch up and narrow the gap down for some consolidation.

Hourly EW

The hourly chart shows my EW markings. We can see that we have completed the wave I of this expected new up move. Also we have broken down from the channel in which prices were rising so consistently. Now we need to target the ends of previous 4th waves atleast in what could be the wave II, correcting the wave I. We have fallen in 5 waves to start with, now further downside is expected atleast another 5 waves down.

Hourly Support & Resistance

The supports as mentioned above should come at bottoms of previous 4th wave i.e. wave [4] and wave (4) of [3], around 5350 levels and below that 5077 levels. Also we are breaking a rising trend line which held the prices for almost 2 months.

Hourly Fibonnacci

The Fibonacci relations suggest that wave [3] was 300% of wave [1]. Wave [5] was 100% of wave [1]. Now we should retrace a fibonacci level of this wave I. We may see good support around 23.6% levels. Eventually we might end the complete correction within the 38.2% to 61.8% band.

Nifty looking good for correction !

Dean Market Profile Elliott Wave , Indices

Hourly EW Chart

Hourly Fibonacci Chart

Nifty came down today and took out the low of wave {4}in 5 waves. There are a couple of possibilities, discussed here. Either we may form a flat with wave (a) around 5300. But if we break this level we may go further down to 5210 - 5230 levels. I have marked important support and resistance levels, and fibonacci levels as well for clearer understanding.

We can see that wave [3] is 300% of wave [1], now we can expect a wave [4]. Channeling technique of EWP gives target around 5200 levels.

Hourly Support and Resistance Chart

In this chart red lines show support and resistance levels, and blue line show resistance. We can short with a stop loss of 5400, with targets around 5200 levels, and below that 5100 - 5075 levels.

Nifty finally breaks out of 5325 - 5400 range on 4th day ! Expect fireworks !

Dean Market Profile Elliott Wave , Indices

This hourly chart shows that we have completed an almost 3 and 1/2 day correction, in possibly wave [4]. Now we have broken out of the 5325 - 5400 range after 3 and 1/2 days, so we can expect this up move to carry some distance, before it loses steam. I have 5510 - 5610 in sight in the near term. But we need to remain above 5400 for this view to materialize, if we slip back into the trading range again, then this sideways action may continue further.

This 10min chart shows the details of this double three pattern which formed on Nifty. We can see a flat followed by a zigzag and finally finished up by a triangle. Such sideways patterns suggest exceptional strength in the markets and we may exploit the maximum target potential for this wave [5]. Also an important point here is that if this double three pattern was indeed wave [4], we have not even completed 14.6% correction of wave [3], now that may happen because of exceptional strength of wave [3] of exceptionally strong 'anticipated' wave [5]. Only time will tell what actually will happen.

An attempt at long term wave count of Dow Jones Industrial Average !

Dean Market Profile DOW Jones , Elliott Wave

This chart DJI monthly chart shows a possible complex correction possibility a double three. We completed an undisputed flat correction in 2008, and since then we are rising in steady fashion in what might be an intervening X wave in a complex correction. Here it is labeled as wave {B}. Since first wave {A} was an irregular flat this wave {B}is particularly strong borrowing the strength from the preceding flat formation and might be forming a DZZ correction. Upon completion of wave {B} we might form a wave {C} which might take many possible formations, it may form a triangle, or a simple impulse, which will be particularly sharp, and will target the lows of 2008, or an ending diagonal. But all this will take considerable time. In the short term though we have to take market action one wave at a time. So lets look at the daily chart.

On this daily chart we can see a possible bullish count where we are forming a series of 1 - 2 / 1 - 2 waves, which should ultimately lead to a blast to the upside, in wave 3 of 3 of 3, but this count though not impossible, does not account for the current global economic scenario. But if the count on the monthly chart above is playing out then we are actually forming wave [a] of the second ZZ of the DZZ correction in wave {B}, to be followed by the dreaded wave {C}. One thing is for sure, the more delayed this inevitable collapse is, the more severe it will be. But right now, baring minor corrections in the context of this long term complex formation, we are headed up, and as always it is advisable to take the market action ONE WAVE AT A TIME!!!!!

Nifty rangebound within 5325 - 5400 range !

Dean Market Profile Elliott Wave , Indices

Hourly Chart

Nifty is range bound in the 5325 - 5400 range. Once prices break out from this range we may see 5520 - 5640 - 5700. If we break down we may correct till 5075 levels.

Nifty continues consolidation today ! Support at 5330 - 5300 !

Dean Market Profile Elliott Wave , Indices

Yesterday's and today's price action on Nifty is looking corrective. We got a support zone of around 5330 - 5300 range. Below 5300 we may correct deeper towards 5265 - 5235. If we get supported in this band we may see higher highs again in this trend. As per EWP wave {4} is in the making, we might see wave {5} of (5) if we get supported at 5330 - 5300 band.

Nifty invaidated our count once again, what now? We Keep Trying !!

Dean Market Profile Elliott Wave , Indices

Nifty Hourly Chart

Always remember what seniors have said about trying to forecast the end of 3rd wave extension, "don't try it"! Once again Nifty moved up, and in the process destroyed the our labeling. But we cannot blame Nifty for that, it was our mistake. Now I am putting my neck out again, and posting yet another chart for Nifty, with modified labeling.

Nifty 10 min Chart

On hourly we are very close to the upper channel boundary, so it can be said that give or take a few points we might be very close to the wave [3] top. This wave (5) of [3] has been especially hard to label, because of the weird waves {1} and {2}. Today I have taken another shot at labeling this wave (5), please look at the 10 min chart for greater detail. with this labeling we get possible target for wave {5} of (5) at 5411 - 5450 levels. Once again we can only wait and watch where this wave (5) of [3] actually ends. At such times when we are not sure of the direction of the market, it is well advised to stay out of it till it makes its mind.

INR rally is at imp resistance area !

Dean Market Profile Currencies , Elliott Wave

USDINR 4 Hour Chart

USDINR is now very close the support levels of 48. We may see a brief pause around this level. On Nifty too we are very close to completing a wave [3] extension. If USDINR gets supported around 48 we may see a brief pause to the Nifty rally that is going on. Based on our bullish views on INR, discussed in our earlier post, (link here), we may be in early stages of a INR rally against the USD. But if we take out 48 - 47.50 band we are headed for the 43 - 42 area for sure on USDINR. What patterns we make on our way will be interesting to watch. Right now we are just about at the terminus of the previous wave IV, lets see if we are offered any support here.

Nifty is right on the target for this big up move from 4588.05 levels !

Dean Market Profile Elliott Wave , Indices

Hourly Chart

10 min Chart

Nifty selected the triangle scenario out of three we mentioned in yesterday's post. The triangle always precedes the end of an important move. Here we may have completed wave {5} of (5) of [3], as shown in the 10 min chart. The count on lower time frame is changed a bit, as per the developments. We also have reached the upper channel boundary, RSI is overbought. On 10 min chart we have super negative divergence on waves {3} and {5} of wave (5) of [3]. So going by the weight of evidence method, we can call a short term top, and if we break critical levels we may get a bigger and much anticipated wave [4]. Target for wave [4] is around 5075 levels.

Nifty facing resistance aroung 5300, once taken out next stop is 5400 !

Dean Market Profile Elliott Wave , Indices

Nifty is sporting 3 different possibilities, two bullish, one bearish. Lets discuss them one by one.

A. Bullish case 1, we might be extending in wave wave 5 of {3}, and we get target for wave {3} around 5400 levels.

B. Bullish case 2, wave 4 of {3} may be forming a triangle and target for wave {3} may be around 5350.

C. Bearish case 3, a low probability expanding diagonal may have completed at (5) as shown in the chart and we will have to tank below the wave {4}at 5159.20 to confirm the count.

I am looking for an extension of wave 5 of {3} or a triangle in wave 4 of {3}, and according to the two preferred cases we might get some more upside may be around 5350 - 5400 levels.

Nifty rising in acceleration channel, wave [3] not yet done !

Dean Market Profile Elliott Wave , Indices

Nifty Hourly Chart

Nifty may not have finished wave [3] as of yet, as suggested in my post earlier today, we may be in wave (5) instead of [5], so there is some upside left still in this move and it looks like we may be headed for 5400 for sure. Look for wave (5) targets around 5300 5350 levels. Prices are rising in the acceleration channel still, we must break it to form wave [4]. Also spot the ZLR formation on MACD on wave (4), and RSI snapping back from OS levels. Prices may target upper channel boundary for wave (5).

Nifty may have completed twave [4], now on its way to wave [5] !

Dean Market Profile Elliott Wave , Indices

Nifty 10 min Chart

Nifty corrected in the first half of the day, and after forming a zigzag rallied smartly right into the closing. We may have completed wave [4] here and now on our way to completing the wave [5]. By reverse fibonacci we get 5262 - 5345 range. The guideline of equality of wave [5] should be equal to wave [1] in time and magnitude, when wave [3] is extended, we get again the target of 5345. So 5345 should be a logical target for wave [5]. As wave [3] was in strong extension, the wave [4] correction ended just shy of the 23.6% retracement mark of wave [3].

Wednesday, February 29, 2012

Nifty - Elliott Wave Analysis.

Tuesday, February 28, 2012

Nifty - Elliott Wave Analysis.

Friday, February 24, 2012

Nifty - Elliott Wave Analysis.

Thursday, February 23, 2012

Nifty - Elliott Wave Analysis.

Friday, February 10, 2012

Nifty looking good for correction !

Thursday, February 09, 2012

Nifty finally breaks out of 5325 - 5400 range on 4th day ! Expect fireworks !

Wednesday, February 08, 2012

An attempt at long term wave count of Dow Jones Industrial Average !

Nifty rangebound within 5325 - 5400 range !

Tuesday, February 07, 2012

Nifty continues consolidation today ! Support at 5330 - 5300 !

Monday, February 06, 2012

Nifty invaidated our count once again, what now? We Keep Trying !!

Saturday, February 04, 2012

INR rally is at imp resistance area !

Friday, February 03, 2012

Nifty is right on the target for this big up move from 4588.05 levels !

Thursday, February 02, 2012

Nifty facing resistance aroung 5300, once taken out next stop is 5400 !

Wednesday, February 01, 2012

Nifty rising in acceleration channel, wave [3] not yet done !

Nifty may have completed twave [4], now on its way to wave [5] !

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