Nifty to remain volatile till Monetary policy

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In our previous update we had mentioned that Nifty will come down to 5600 which is still not ruled out. The reason behind it is after falling from 6110 till 5652, broader markets relieved from oversold zone. Many traders and broking houses are very bullish and expect it to reach 6200-6500 mark after a 'V' shape rise from 5652, but is that really possible? Does the wave counts really supports?

On daily charts, it is observed that prices fail to cross 5970 which is really very crucial resistance for the markets. The overhead supply is clearly observed on smaller time frame. Candle stick pattern formed on 11th of March 2013 was a Bearish Harami pattern and got the confirmation on next day as there was a black/red candle, thus giving clear signal that the trend is negative. Nifty is now at a crucial juncture and it is strictly advisable for positional traders to stay away from the markets as there is no clear trend.

On a smaller time frame, Nifty is clearly making a triangle pattern, and that's the reason behind this volatility. The triangle pattern is been formed in wave b of wave B and it has completed a and b leg  (a-b-c-d-e) that means c is ongoing. Till monetary policy e leg will be completed and new leg will start.

As per wave perspective, prices after completing wave A at 5652, prices are now  moving in the form of wave B which has three legs (a-b-c). Where wave a was completed at 5971 and wave b is ongoing in the form of triangle. Prices can test 6050-6080 in the form of wave B, for that it is imperative for prices to break 5970. Once wave B is completed prices will move down very sharply in the form of wave C which is impulsive in nature.

Moving averages is whipsawing which suggests that there is no trending move. Momentum Indicator RSI has relieved from oversold zone. MACD has given us buy signal but it is below the equilibrium i.e 0. MFI and OBV has started making a base to move on either side.

Advance/ Declines on Friday was worst due to negative close. Where advance were 517 and declines were 1007.

In short, Nifty is clearly poised for intraday traders. For a trend to move in a positive direction Nifty need to cross 5970. Failure to cross this level will indicate that wave B is completed at 5971 and wave C has started which can move down till 5600.

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