NIFTY FIFTY
- Thread starter AMITBE
- Start date
- Status
This is from my piece on Aug 29. Reproducing here:
"Yes there is a lot of negative bias, not in the NIFTY itself as much as it is amongst the technical analysis wizards of the media, especially on some popular business channels.
They have been hollering at the top of their lungs of impending doom since the time the Index crossed over into the 2100 zone and even a little before.
Apparent to all of us by now, no such thing has come to pass.
Primarily their point of view comes from seeing a build up in open interest on the Index which they in turn drum up in any case.
Besides this, an essential tool also popularly used by them is the Elliot Wave Theory.
Its early days yet into the Sept. contracts to go by the open interest angle as this can swing either way depending on how the market moves.
Open interest is more a trend play. On the down side should the Index hold at lower levels, covering of positions will drive up the Index as was witnessed on Wednesday when NIFTY moved up strongly from 2300-2305 to 2328, the last traded value for the day. A simultaneous Bull sentiment swung in here as scrips were picked at lower levels along with quick call options play on the Index itself.
On the upside, open interest builds up on up-trending stocks and indexes too, the reason why I said its early yet to go by open interest just yet.
In the Elliot Wave theory, for a very broad and brief quick look-see, there are five waves in the direction of the main trend. From the starting point, the First wave moves in an upward slant to the point 1. The Second wave denotes a correction to the First wave, and dips down to the point 2, well above the starting point. The Third wave turns upward again and climbs sharply past the point 1 and peaks at the point 3. (The popular assumption is that the Third wave makes the steepest climb). The Fourth wave again is a correction to the down and stops at the point 4 and is above the point 2. The Fifth wave again turns upward to the point 5, normally above the point 3. (Again the popular assumption is that, while the Fifth wave can climb above the point 3, it does not climb quite as sharply or steeply as the Third wave). All this will become easier if you drew a zig-zag upward moving sketch.
After the Fifth wave, there are three more down trending waves, but there's no need to get into that at this point.
Each wave is never one continuous line, but a number of sub waves. In its climb from 2300 to 2400 levels, the NIFTY several times went up and down, and these can be considered as sub waves.
Theoretically speaking then, my take is, the analysts cannot seem to decide whether the NIFTY at present, is in the midst of the climbing Third wave, or is commencing the Fourth (corrective) wave.
Now, for NIFTY to give evidence of the Third wave, according to me, it should not correct to break below 2300, or 2280 at the most. And should it continue with an up-down movement towards past 2400 and sustains it, that should be evidence enough of the Third wave, which, also going by the Fibonacci sequential numbers (some other time on this) is pointing towards a possible peak at 2580 plus.
Should the NIFTY break to the down, below the 2260 mark, the assumption would be that we indeed are in the Fourth corrective wave, and may well see a re-entry into the 2100s again. And if so, then the Fifth upward wave would start from there.
The NITY is in a bit of a grey zone at this point Things are interestingly poised as those holding profits would not easily squander them should the market climg sharply, as selling pressure would prevail there. By the same token, looking at the strong resilience that the NIFTY has displayed at lower levels, there will not be much panic till 2320-2300 hold and buying would emerge here taking the market up. For me, the lowest level where bottom fishing will strongly prevail is 2270-2280.
Below this, who can tell.
Thanks and regards."
It does appear then, that we are into the Fifth ascending Wave.
The fact that 2300 was not broken, and that 2500 is here, thats our confirmation.
Now, the Fifth Wave is characteristically slow and passive, as is evident from the recent climb from 2430 and up.
2505 and beyond to 2512-2520 will put the NIFTY into a new bull orbit without any doubt.
Should there be a struggle here, some choppiness is likely, as the current rally is ten days old without coming up for air.
2485 is a critical level to hold, as we may see some waves within waves in this Fifth Wave, obviously implying great turbulence.
"Yes there is a lot of negative bias, not in the NIFTY itself as much as it is amongst the technical analysis wizards of the media, especially on some popular business channels.
They have been hollering at the top of their lungs of impending doom since the time the Index crossed over into the 2100 zone and even a little before.
Apparent to all of us by now, no such thing has come to pass.
Primarily their point of view comes from seeing a build up in open interest on the Index which they in turn drum up in any case.
Besides this, an essential tool also popularly used by them is the Elliot Wave Theory.
Its early days yet into the Sept. contracts to go by the open interest angle as this can swing either way depending on how the market moves.
Open interest is more a trend play. On the down side should the Index hold at lower levels, covering of positions will drive up the Index as was witnessed on Wednesday when NIFTY moved up strongly from 2300-2305 to 2328, the last traded value for the day. A simultaneous Bull sentiment swung in here as scrips were picked at lower levels along with quick call options play on the Index itself.
On the upside, open interest builds up on up-trending stocks and indexes too, the reason why I said its early yet to go by open interest just yet.
In the Elliot Wave theory, for a very broad and brief quick look-see, there are five waves in the direction of the main trend. From the starting point, the First wave moves in an upward slant to the point 1. The Second wave denotes a correction to the First wave, and dips down to the point 2, well above the starting point. The Third wave turns upward again and climbs sharply past the point 1 and peaks at the point 3. (The popular assumption is that the Third wave makes the steepest climb). The Fourth wave again is a correction to the down and stops at the point 4 and is above the point 2. The Fifth wave again turns upward to the point 5, normally above the point 3. (Again the popular assumption is that, while the Fifth wave can climb above the point 3, it does not climb quite as sharply or steeply as the Third wave). All this will become easier if you drew a zig-zag upward moving sketch.
After the Fifth wave, there are three more down trending waves, but there's no need to get into that at this point.
Each wave is never one continuous line, but a number of sub waves. In its climb from 2300 to 2400 levels, the NIFTY several times went up and down, and these can be considered as sub waves.
Theoretically speaking then, my take is, the analysts cannot seem to decide whether the NIFTY at present, is in the midst of the climbing Third wave, or is commencing the Fourth (corrective) wave.
Now, for NIFTY to give evidence of the Third wave, according to me, it should not correct to break below 2300, or 2280 at the most. And should it continue with an up-down movement towards past 2400 and sustains it, that should be evidence enough of the Third wave, which, also going by the Fibonacci sequential numbers (some other time on this) is pointing towards a possible peak at 2580 plus.
Should the NIFTY break to the down, below the 2260 mark, the assumption would be that we indeed are in the Fourth corrective wave, and may well see a re-entry into the 2100s again. And if so, then the Fifth upward wave would start from there.
The NITY is in a bit of a grey zone at this point Things are interestingly poised as those holding profits would not easily squander them should the market climg sharply, as selling pressure would prevail there. By the same token, looking at the strong resilience that the NIFTY has displayed at lower levels, there will not be much panic till 2320-2300 hold and buying would emerge here taking the market up. For me, the lowest level where bottom fishing will strongly prevail is 2270-2280.
Below this, who can tell.
Thanks and regards."
It does appear then, that we are into the Fifth ascending Wave.
The fact that 2300 was not broken, and that 2500 is here, thats our confirmation.
Now, the Fifth Wave is characteristically slow and passive, as is evident from the recent climb from 2430 and up.
2505 and beyond to 2512-2520 will put the NIFTY into a new bull orbit without any doubt.
Should there be a struggle here, some choppiness is likely, as the current rally is ten days old without coming up for air.
2485 is a critical level to hold, as we may see some waves within waves in this Fifth Wave, obviously implying great turbulence.
saint said:
Very nice,Amit........and thanx as always! 
Time ago I had first suggested this here without much feedback:
http://www.traderji.com/showthread.php?t=2753
Anyways...will run this for now.
The fall is quick...and 2485 is most important now. Yesterday's low at 2477, then yesterday's low support at 2473 which was not tested would be next levels.
Not saying it could go that deep, only giving levels for info.
Made a double top at 2510-2511 a while ago and then the sharp drop.
Holding up on a bounce at 2490 for now, and making lower highs and lows.
Not saying it could go that deep, only giving levels for info.
Made a double top at 2510-2511 a while ago and then the sharp drop.
Holding up on a bounce at 2490 for now, and making lower highs and lows.
- Status
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| M | Nifty option strategy chart in Dhan Optiontrader | Brokers & Trading Platforms | 3 | |
| S | EOD data for Nifty 50 with volume | Introductions | 0 | |
| L | Nifty fifty and stock futures | Swing Trading | 13 | |
| M | Veluri Strategy intraday nifty fifty | Software | 96 | |
| T | Nifty Fifty Only + GOLD SILVER | Data Feeds | 0 |
Similar threads
-
Nifty option strategy chart in Dhan Optiontrader
- Started by MetatraderUser
- Replies: 3
-
-
-
-