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Retail Research 1
Midweek Technical Update July 07, 2011
As we have mentioned in our July monthly report, currently the
small x wave is in progress after the completion of Neutral
trianglefrom the 52 week high of 21,207.
And this x wave has taken exact resistance at the b-d trend line
drawn on the chart above in red color on 07th
July 2011. We haveprojected the upper limits of the current
small x wave with the help of 2 methods as under:
1. Taking 61.8% of the entire length from A to E - which comes
to 19,656 as marked on the chart above.2. Based on our assumption
that Neutral Triangle has got over at 17,314 on 20
thJune 2011, once any triangle is over, the
thrust, which occurs out of this triangle behaves as per some
specific rule designed by Glenn Nelly. In case of Neutratriangle
according to the theory the thrust can be up to 75% of the largest
leg of the triangle. The largest leg was C in thepresent case and
if we take 75% of it and project it from the end of wave E, we get
19,831 as a probable target.
It is also important to analyze the structure of this small x.
We had made an attempt to do this based on theory to know the
structureof current small x, which is in progress.
The chart given below is a step-by-step attempt to forecast the
internal structure of the small x.
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In last 8 months the tops and the corresponding stochastic value
are as under:
ZeroPoint
B Point D Point Small x so far
Top 21,109 20,665 19,811 19,031
89 day Stochastic 99.33 83.34 71.42 56.58
89 day Stochastic which is considered as long term Stochastic
was trading above 70 level, whenever a significant top was made
andat this juncture it is trading at 56.58. Thus it has got enough
room to move upwards. In short Stochastic indicator on long term
chartsas well as 14 day RSI are yet to get or reach near the
overbought region. Hence the Sensex could after a brief correction
(in wave bcould rise higher and by that time both the RSI and
Stochastics could get overbought.
Analyst: Adwait Sapre ([email protected])Note - Once the
market opens for trade, the analyst will review it and decide to
give the call through an internal mail/SMS at the same or different
levels of entry, target andstoploss or not give the call at all.
Clients could get in touch with the analyst through mail or with
the their designated dealers to check about this.
HDFC Securities Limited, I Think Techno Campus, Building B,
Alpha, Office Floor 8, Near Kanjurmarg Station, Opposite Crompton
Greaves,Kanjurmarg (East), Mumbai 400042, Fax: (022) 30753435
Disclaimer: This document has been prepared by HDFC Securities
Limited and is meant for sole use by the recipient and not for
circulation. Thisdocument is not to be reported or copied or made
available to others. It should not be considered to be taken as an
offer to sell or a solicitation tobuy any security. The information
contained herein is from sources believed reliable. We do not
represent that it is accurate or complete and itshould not be
relied upon as such. We may have from time to time positions or
options on, and buy and sell securities referred to herein. We
mayfrom time to time solicit from, or perform investment banking,
or other services for, any company mentioned in this document.This
report is intendedfor Retail Clients only and not for any other
category of clients, including, but not limited to, Institutional
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