Markets are poised for bounce back upto 5070

In the Figure below as you can see it looks like Nifty has completed the 3rd wave (shown as bold number) of the downside Impulse move and headed upwards to form the Corrective 4th Wave (shown as bold number). If this analysis holds then nifty is about to retrace 38.2% of the completed 3rd wave which comes approximately at 5070 as shown in the second fig below.

 

Also the Interesting thing is that the 61.8% retracement of the 5th wave (shown as normal number) of the Larger 3rd wave(shown as bold number) also comes near the 5070 Level as shown in below fig.

Which confirms the Min upside as per the above analysis using EWT is 5070. This is because the direction and magnitude of the movement of the market is always inclined towards the direction and magnitude where more Fibonacci relations are fulfilled.

Overall one can easily go long at the current nifty levels with a Minimum target of 5070.
Also one has to note that the maximum upside for the nifty is capped at 5350 which is the termination point of the 1st wave which the 4the wave should not retrace as per EWT.

Note: The Wave numbering is been altered a little from our previous analysis mainly on the 5th wave of the 3rd wave respecting the markets flexibility to create alternatives.

Whether History Will Repeat Again??

As all of us are waiting for the stock markets to bottom out and start moving up to create real wealth for the economy and the people, here is one interesting insight to Predict the bottoming of this market on beforehand so as to get the full benefit of the following upside.

As we can see from the above chart every time the markets have fallen more than 30% from its peak it has bottomed out with a signal in Long Term KST with both the Green line(Long Term KST) and the Red line ( 9day moving avg of KST) falling below that Oversold Zone Line which is acting as a support for the indicator and in turn for markets. In the Chart you can see the 2001 fall which is the 2nd Wave of Cycle degree bull market as per Elliott Wave theory has ended with Long Term KST and its 9 day moving avg falling below that support line. Also Same phenomenon is repeated in 2004 fall, 2006 fall and 2008 fall without fail. This Phenomenon can help us at least in predicting the Near bottom levels of the markets from where it can start picking up with conviction.

So we can conclude from this discovery with a reasonable degree of confidence that markets have not yet bottomed out so as to jump into it for making investments with conviction. All retail people can wait till this phenomenon unfolds and then make their decision to enter the markets with their hard earned monies. There is no need to panic with a left out feeling and buy in the markets every time it goes up in a bear market rally.

Nifty Continuing its 13-15 Week Cyclical move

In consistent with our previous posts Nifty looks to be continuing with its 13-15 week cycle which we discovered on 19th may 2011. Also there is one new pattern emerged as shown in the figure below that every alternate time nifty completes the 13-15 week cycle it creates a New Low. So this time as shown in the figure it looks like Nifty will pick up from current levels without creating a sharper new low which means a short term pullback rally is expected.

This move can stretch up to 4932 levels which is 38.2% retracement of the downward Impulse Wave created by Nifty as per Elliott Wave Theory as shown in the below figure. Also the 5 wave impulse pattern found in Long Term KST also confirms the reversal of the down move on a short term basis.

Our Previous Posts on our Website (for reference)

(Posted on 5-May-2011)
https://drive.google.com/file/d/0B8gu9KNFhbuJdDRWRzh2ZVgzcTg/view?usp=sharing
  
(Posted on 19-May-2011)
https://drive.google.com/file/d/0B8gu9KNFhbuJVGU4SUEzVDM1SkU/view?usp=sharing

(Posted on 31-May-2011)
https://drive.google.com/file/d/0B8gu9KNFhbuJSHBMWnh4TkpPckU/view?usp=sharing

(Posted on 09-June-2011)
https://drive.google.com/file/d/0B8gu9KNFhbuJc05oUkp0MDl1VEE/view?usp=sharing

(Posted on 29-July-2011)
https://drive.google.com/file/d/0B8gu9KNFhbuJcDF0X3R6LTVJV0U/view?usp=sharing

(Posted on 19-August-2011)

https://drive.google.com/file/d/0B8gu9KNFhbuJdnhRcldpSmF1N1k/view?usp=sharing