Navjyot Gill I have been actively associated with the Equity and Commodities Markets for the last 26 years. I started out as an investor / trader and have been a sub-broker with M/s Motilal Oswal Securities Ltd. for 6 years, followed by M/s Karvy Stocbroking Ltd. for 2 years and presently with LKP Shares Ltd. It is important to add that I have passed the NCFM and MCX certificate courses several times over the years. At Motilal Oswal, I was awarded the medal for the Remisier of the month on an all India basis, and have been consistently in the top 5.

Medium Term View Of Indian Equity Markets

1 min read

It is advisable to use the Nifty as a benchmark for our Equity Markets. It is widely traded and shows the highest volume along with all it’s derivative products.

I will mainly be using the Elliott Wave Theory for my analysis for the long to medium term aided by other momentum indicators to substantiate for the short term.

Nifty Weekly Charts
Nifty-Weekly

 
Position of the Nifty : Only The Elliott Wave can precisely pinpoint the exact position of any index with a view of the probable direction. This position holds the key for all future studies. An erroneous study will take us on the wrong path and naturally suffer losses. It is for this reason that the location of an index has been the bone of contention between many Elliotticians. Many differ on the wave count and therefore the position.

Anyway, I will try to keep it simple and put forward my analysis : The Nifty is presently in minor wave 5 of Intermediate wave  (1) of Primary wave  (I) of a new cycle which started in March 2009.  It completed minor wave 1 at 4693 in June 2009, followed by the corrective minor wave 2 in July 2009.  Minor wave 3 started here at 3919 and rose steadily to 6388 till Nov’ 2010. Minor wave 4 went into a long period of correction down to 4531 till late Dec’ 2011.  Minor wave 5 started here and still continues and has a minimum target of 6700.

Analyzing minor wave 5 further would mean dissecting it as follows : Sub wave or minute  wave  i of minor wave 5 ended at 5630 and minute wave ii declined to 4770 (75% correction of the previous minute wave i. Minute wave 3 extended till 6112 followed by the minute iv correction to 5664  It is here that minute 5 started and we are presently at 5863. ( It is advisable to refer to a Nifty EOD chart simultaneously).

The index has just risen above its 10 and 20 days simple moving averages. The RSI  is at 48 and still rising. The ADX is at 27.59, with the + DI @ 33.27 and – DI @ 18.11 which is very positive, suggesting a new rising trend. The On Balance volume is at 2281 and rising .

Combining all the data at hand, it is safe to assume that minor wave 5 has a minimum achievable target of 6700 in the coming months, albeit,  for its minute corrective waves along the way, which I will analyze closely and keep my posts updated.

Navjyot Gill I have been actively associated with the Equity and Commodities Markets for the last 26 years. I started out as an investor / trader and have been a sub-broker with M/s Motilal Oswal Securities Ltd. for 6 years, followed by M/s Karvy Stocbroking Ltd. for 2 years and presently with LKP Shares Ltd. It is important to add that I have passed the NCFM and MCX certificate courses several times over the years. At Motilal Oswal, I was awarded the medal for the Remisier of the month on an all India basis, and have been consistently in the top 5.

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4 Replies to “Medium Term View Of Indian Equity Markets”

  1. Trading is a loss making endeavor so long we take it as an art rather than science. For any field to pass through the rigors of being called science, it has to pass the test of reason and logic. Anything that cannot be accountable, cannot be trusted. This is the simple rule of back testing propagated by Ed seycota. Going by just this benchmark I am afraid Elliot wave is an ambiguous field of study with a 1000 and one parameters based on another 1000 and one conditions. I am yet to meet or hear of a software guy who has successfully deployed elliot wave in codes to back test its accuracy. what cannot be coded, cannot be proved, what cannot be proved, cannot be implemented. To put money in what cannot be substantiated is a sin.

    I have seen a million elliot wavers back-track their horrible results to wrong calculation of waves and tell me that if we had taken this as wave 2 instead of 3, blah blah blah… This is almost a joke. Hindsight is always 20/20. it is the foresight that gets u money, speaking of which even Elliot didn’t have much.

    1. Insufficient knowledge can lead to a strong biased view. Firstly, we are not talking about trading. Technical analysis is an art and not a science. There is no Holy Grail. Interpreting the waves is again an art. But, let me assure you, The Elliott Theory has passed the test of reason and logic through the times. Ed seycota does not fit in. There is absolutely no ambiguity in this field of study. It has stood the test of time and will continue to do so. Besides, there are only three main cardinal rules that guide the waves and not a 1000 as you put it. Unfortunately, you have met all the wrong or amateur Ellioticians ( I made it a point to mention this in my post, that many Ellioticians differ in their wave count).Also, Elliot never recommended his theory for trading. It should always be used for investing at the right time and holding till the evidence in the market place recommends to the contrary. In case you are a day trader, you will always be doomed.

    1. Dear Ram, It is very clear: a declined from 6112 to 5854 (258 points). b rose to 5971 (117 points) and c declined to 5664 (307 points). I hope this satisfies your query.

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