Nifty: Combining Hourly & Daily Momentum Reading

Dear Friends,
The upmove from 4532 to 5173* has kept us busy in revising our Counts from the basic ABC corrective to Double Combo WXYXZ to current Expanded Flat pattern.
And it was MOMENTUM that kept on guiding us that despite the EW Count indicating completion of upmove, reversal had not got initiated.
And on occasions where we were caught on the wrong foot,one simple miscalculation was---reading too much into Hourly Momentum charts and trying to take next positions on their basis----not giving proper weightage to Daily Momentum in the "heat of things" where Hourly Charts overshadowed other aspects.
In view of that , I have decided to post an Exl Chart indicating Closing prices along with 5HrEMA and 5DyEMA together so as to always see the Hourly closing vis-a vis Daily EMA and take position accordingly.
All of you should prepare this chart and follow it,particularly for carrying forward your trades to the next day



As one can very easily see,closing prices though occasionally breached 5Hrema never ever breached 5dayema to warrant any shorts carry-over to next day.

The above chart can be fine-tuned by an individual to take into consideration variuos permutations--

Raghu

Count Altered at Lower Degree:19.01.2011

Seen in Hourly chart:



As shown in the Chart above,this Y.c(ii) is capable of coming up to 5276.

As Y.c(i) = 5400-4639=761
61.8% retracement=5109
76.4% retracement=5220

Lets see how it pans out.

Raghu

EW , Trendlines and Momentum

I keep telling all my trader friends to never see EW in seclusion.
When a Corrective is capable of retracing 23.4% to 99.9% of Motive; and
an extended 3rd wave is capable of doing 162% to 425% of Ist wave,
THEN Momentum becomes the closest friend of the Trader to gauze the wave;
AND Trendlines,in words of my friend HD, are like toll-gates where the wave is most likely to stop(if not reverse)and move ahead after paying the toll.And to me,it is not only the lines joining H-H,L-L,or L-H that define a trendline but also the MAs.I use 9,20,50,100 & 200 DMAs though of-late I see some of my friends using 8,13,34 etc.

Now,as per my EW Counts,we have reached a very important point : A threshold




And how do we stand as per the parameters of Momentum and Trendlines?



Thus,not only the trendline joining the recent highs of 5400 & 5100 has been breached decisively( closing has been above it for four days now) but also on friday we have,for the first time closed above the 50 DMA as well.




A look at the popular Momentum indicaters on Daily Charts shows that:
1.Higher High & Higher low continues;
2.Daily close on Friday was above 8,13,34 DEMA;
3.MACD & RSI show no sign of let-up in up-momentum;
4.STS is the only indicater in Daily Chart that has shown a minor reversal;
5.Formation of doji candles for last three days with a very small daily trading range also is a give-way that up-momentum is losing steam;
6.The 9 day Bolinger Band has been acting as a barrier for last three days.
But no signs of reversal so far.

And what does the Hourly Charts say on same parameters?



And here the first signs of reversal can be seen.
But Hourly Charts can not be given more credence than the Daily Charts and the Indicaters here need confirmation from Daily Charts.

Conclusion:
Same as beginning.A threshold as per EW but no confirmation from Momentum & Trendlines as yet.So take your positions prudently. Personally I have initiated shorts with a SL at 4899.Targets,as per individual appetite, being 4805 onwards as we proceed.

Raghu

Nifty Higher Degree Counts: Difficult to go below 4300

May be I am being conservative.
But why rush?

Raghu