Nifty(5204): Nifty formed a hanging man pattern on Friday, just under the 200DMA. Hanging man pattern needs a follow through sell off else the signal would be rendered void. The first sign that this market starting to correct would be when Nifty dips below 5162.
The Euro has come to perfect level for it to end the counter-trend rally and begin a decline. AND we have an European summit today! Seems like a perfect setup.
The environment seems to start looking like October 2011 when the equity markets were ignoring what the bond markets were saying. Portugal has gone over the cliff and equity markets are not even taking note of it - watch out Portugal will very soon be making headlines and "surprise" everyone.
On Nifty, in Elliot wave terms, even if we see this market as a Triple Zig Zag - the current decline seems to be incomplete.
The interesting thing with this interpretation is that in each of the ABC patter. C wave is almost perfectly 1.618 times A. So if we have an overlap at 4800 on the Nifty when this pullback comes through the target for it could be much lower than 4530. But that is a topic for another day.
Nifty supports: 5162, 5127 and 5040. Resistance 5225, 5275.