Monday, June 18, 2012

EOD Analysis For 18th July 2012 and Outlook For 19th July 2012

OI in Nifty futures marginally higher and a knee-jerk reaction IMHO for the RBI announcements

Fundamentally, the move is completely justified given the expectations of monetary easing that is expected from major central banks; although one must also mention here that neither the business credit expectations nor the inflation woes can be tamed by RBI's measures with liquidity coming from abroad IMHO. Given the limited tools at their disposal, RBI has done the right thing and markets will appreciate that though a lot of day traders felt disappointed today - RBI has signaled very clearly today that it is not toothless and has a fair pulse of economic conditions.

Hope you are all on your toes as we alerted readers last week itself that the current week is going to be exciting for trade and trending in either direction :D

Whilst Raghuji covers EW in depth and detail, allow me to just add 1 point regarding characteristic of waves
B - Waves are pretty phony

Why is this important?
The current fall in Nifty in all likelihood is a B wave [B wave of a smaller degree of corrective of corrective rise from 4770-5184] One may expect an upmove contrary to short term expectations AS LONG AS 5032  holds out on closing basis.

The upsides on FTSE, DJIA, DAX are all corrective bounces after falling almost 600 points, 1200 points and 1000 points respectively from their peaks - the minimum requirement of retracing 61.8% have been fulfilled though there is room for some more corrective bounces

A few days later the prices will reflect these points on the ticker in all likelihood.

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