 Index is showing reversal sign at upper trend line resistance: HDFC Securities

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->
Observation:  Week’s action formed a shooting star candle on weekly chart at the crucial supply zone which is a bearish reversal indication in short term.  Index is showing reversal sign at upper trend line resistance, in past seven months the line is intact and four times it has resisted the bulls and provided meaningful corrections.  In our preferred wave count; some major degree rise leg has completed at 8997 or likely to complete around 9000/9050. In major wave labels i.e. “wave v & wave iii” there are couple of alternates are open for end of those waves; so wait for some time to get the exact larger degree label. This confusion is happening due to the extending waves in “wave v” (It is extremely difficult for any Elliottician to project the extending waves in “wave v”).  As of now it seems like index has completed “wave v” or it will complete around 9000 – 9050 levels. Index is in progress of new falling leg with the reversal level of 9050 (Close) which could be a start of larger degree falling leg or minor fall.  We have already advised to take serious profits in long positions. Though we may be early in giving bearish call it safeguards the investors’ capital. We may miss the initial falling leg and advise shorting only after confirmation.  Initially we may slide down towards 8720 – 8600 levels. This view would negate if price closes above upward sloping trend line; current value is placed at 9050.

Observation:  Day’s action formed engulfing bear candle at the resistance zone which is a bearish reversal indication.  Technically, index has decisively breached the crucial level of 8860 and fell down sharply with strong bearish note which signifies the earlier indicated falling leg in progress.  Price has attained the earlier indicated down side target of 8795 – 8730 (Gap support). Now it is crucially poised above the support of 8730; on any fall below 8730 index could extend fall and slide down towards 21 Day EMA i.e. currently placed at 8605.  As per Elliot wave, we are in internal “wave iv” and internal “wave v” is pending i.e. current fall is a retracement before “wave v” up unfolds. In other words after this correction price could visit once again towards the upper trend line 9000 - 9050. But if price slide is in impulse manner which is five wave decline then the unfolding “wave v” has already ended at 8997.  Mid cap index has not fallen much so after the correction there could be chance of one more rise, but we are not sure about the stock movements as last couple of days we see stock specific movements within midcaps


LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3011086