Nifty Page : 29.8.2012

First of all , I thank all of you for the generous e-mails and kind words that you people have used to appreciate my blog-posts. I donot claim to understand markets better than others. However, after getting roughed-up for years , I have tried to simplify my analysis and trades. At current level of my understanding, I have come to three most simple tools that I believe if used in synchronization,would work wonders for all users.
1.Channels
2.Divergences in overbot and oversold zones with the help of RSI and MACD histogram
3. EW patterns

And of the three,I have spent maximum time & energy on understanding EW.And therefore sometimes I feel I tend to give more weightage to EW patterns and thresholds defined by it. And somehow that is where the Market shakes me off --- the latest examples being the Nifty  and ICICI Bank. While my EW labels were leading me to an intermediate Nify top at 5444 and ICICI bank top at 983 supported by channels and divergences in over-bought zones. And markets chose to climb just a shade more--- formed tops at 5448 and 988 respectively--- crossing the EW thresholds and filling my mind with self-doubt and not allowing me to take full advantage despite having created short positions.
In case of L & T,despite having a perfect call I did not take full advantage and that brings to forefront my shortcomings as a trader.Today when I see 1450 PEs(bought by me at Rs.14/- and sold at Rs.20/-) trading at Rs.85+ in just four trading sessions, I cannot help laughing at myself.
So even a "near perfect analysis" was not converted into windfall gains---and I need to delve deeper to find reasons for it and improve upon them.

Continuing with the Nifty tracking, yesterday morning I had posted two channels:

And see how they defined the moves during the day---while the red channels defined the day's top---the black one defined the bottom

And Hour charts have gone to oversold and positive divergence has been noticed.However,as the close was below 5 hr.ema,another dip below 5312 cannot be ruled out---with positive divergence or not,should be watched--

And EW wise,two set of labels were mentioned yesterday EOD also:

This 5 wave form represents A of the larger retracement ABC which is likely to fan out as follows:

And the upmove that would retrace this 5 wave A would be B --

For further details on these EW labels,please see yesterday's Nifty Page----Nifty Page:28.7.12
First Resistance is likely to be the 34 hr EMA currently at 5368 or the black channel:

EOD
While yesterday's last hour upward move had broken the red channel and indicated a smaller degree retracement of 5448-5312,today's first 5 minute candle negated that and we remain firmly in red channel indicating sub-wave A of the retracement ABC(of wave 5033-5448):

In fact,towards the end of the session,black channel was looking broken and action looked like shifting deeper into the sharper red channel which is seen on the Hour charts as below:

While yesterday we had seen an Hourly close above 5 Hr EMA,today it traded below that line throughout the day.
On Daily charts 5/10 DMA x-over has taken shape and long term TL seems to have been breached:

 And next TL supports are indicated by following chart:

Although Hour RSI-14 has moved into overbought zone but the Impulsive A's ending point is not discernible:
(i)=5448-5394=54
(ii)=5394-5421=27
(iii)=5421-5382=139* and going strong---although 5365 has been previously seen as a good support/resistance point.
And at times following TL support may also act: