Near Term Trend: ↓ Down
Market update: Nifty Opened strong and traded strong above 10900 however slipped suddenly and fell more than 150 points from days high and dropped to10760 levels. It finally closed with a small loss of around 30 points at 10800 levels.
Todays Opening was crucial, the way nifty opened and traded strong gave a signal that probably yesterdays sharp fall was just a bear trap & now Nifty once again ready to move up. Initial 1st hour of trade was pretty strong and usually (9/10 times) such trades results in very strong moves by market however today was an exception and the initial up move turned out to be a bull trap actually.
Once Nifty broke below 10840-10850 levels it became clear ( almost) that markets are not ready to move up and probably has opened a new leg on the downside. When we say downside we mean there is a real risk of testing 10600-10640 levels once again in near term and if 10600 gets broken this time then we are looking at much lower levels (10200-10300 or even lower).
Technically speaking, it seems C leg was done on the upside and D leg has started on the downside. Now it remains when and where this D leg ends and final E leg begins. (for wave counts ref my previous posts).
In terms of trading dynamics Diametric patterns are most difficult to trade and after diametric comes triangles. What we are seeing in this move after 10K levels ( from Oct lows) is a combination of Diametric and Triangle. Both these patterns combining together are giving an extremely tough time to traders. Reason they are tough to trade is because they are erratic and as per neo wave they are virtually exception to every rule in the books.
Having said this, there is no reason to despise or hate triangles/Diametrics in spite of the fact that they are tough to trade and can cause a string of bad trades for one simple reason- The trend which follows once these patterns are complete is directional & pretty straight forward and if one has patience to remain invested he can easily reap the rewards later.
Market update: Nifty Opened strong and traded strong above 10900 however slipped suddenly and fell more than 150 points from days high and dropped to10760 levels. It finally closed with a small loss of around 30 points at 10800 levels.
Todays Opening was crucial, the way nifty opened and traded strong gave a signal that probably yesterdays sharp fall was just a bear trap & now Nifty once again ready to move up. Initial 1st hour of trade was pretty strong and usually (9/10 times) such trades results in very strong moves by market however today was an exception and the initial up move turned out to be a bull trap actually.
Once Nifty broke below 10840-10850 levels it became clear ( almost) that markets are not ready to move up and probably has opened a new leg on the downside. When we say downside we mean there is a real risk of testing 10600-10640 levels once again in near term and if 10600 gets broken this time then we are looking at much lower levels (10200-10300 or even lower).
Technically speaking, it seems C leg was done on the upside and D leg has started on the downside. Now it remains when and where this D leg ends and final E leg begins. (for wave counts ref my previous posts).
In terms of trading dynamics Diametric patterns are most difficult to trade and after diametric comes triangles. What we are seeing in this move after 10K levels ( from Oct lows) is a combination of Diametric and Triangle. Both these patterns combining together are giving an extremely tough time to traders. Reason they are tough to trade is because they are erratic and as per neo wave they are virtually exception to every rule in the books.
Having said this, there is no reason to despise or hate triangles/Diametrics in spite of the fact that they are tough to trade and can cause a string of bad trades for one simple reason- The trend which follows once these patterns are complete is directional & pretty straight forward and if one has patience to remain invested he can easily reap the rewards later.
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