Near Term Trend: ↑UP
Market update: Nifty opened again with a 50 points gap at 11630 levels however dropped to 10575 levels before bouncing back again to 10620 levels. it closed at 10620 up 50 points.
Yesterday we had mentioned a possibility of Nifty making a double top at 11565 levels (if Nifty had fallen below 11500 levels) however since markets made a new high that probability is not valid now. Having said this the entire move from lows of 10600 is getting over stretched and appearing to be in its final leg since quite a while now ( In our wave count we are counting it as wave 'C' of ABC of second corrective). Let me explain.
lets analyze wave count of recent move from 10585 to 11630 (todays high)
Wave 1= 10585 to 10880 = ~300 points and took 4 days
Wave 2 =10880 to 10730 = ~150 points (high point of wave 2 was 10930 as it was an irregular correction, so the fall could be measured as 200 points too but that doesnt matter)
Wave 3= 10730 to 11560 = ~830 points ( ~278% of wave 1)
Wave 4= 11560 to 11320 = ~240 points
Wave 5= 11325 to 11630 = ~300 points & has taken 4 days as well ( matches wave 1)
Usually wave 5 matches with wave 1 especially if its part of overall corrective pattern ( wave 5 of wave C).This can also be read as final leg of final leg.
There is no doubt that markets are in a uptrend however evidence after evidence are piling up that a serious correction can begin any time. Market remains euphoric, over bought and seeing strong negative divergences on multiple indicators ( daily RSI etc). Many feel that Nifty is already done with the correction ( fall we saw last week when Nifty fell to 11320 levels) however it was too small and too shallow to be called as a full correction of entire wave. It may be a correction for one of the inner wave of the move (wave 3) but the entire move has still not been corrected and a fall is still pending and overdue now.
In any trend retail traders or the common man is usually the last one to enter ( wave 5) and that's when the trend ends, if our wave count is correct then wave 5 is ongoing ( and achieved similarity with wave 1 today) and last 3-4 days markets is seeing lots of euphoria and optimism which could be a sign of common man entering now hence there is good chance of this move getting over (for now).
Coming back to entire move from lows of 10k (Sep last year) to 11630, the total time has reached around 276% now ( which is rare). Though we did see some correction exactly from 261.8% levels it was still part of the ongoing move only and the total corrective move still continues. Now crossing 261.8% is not common and but still within rules of Neo wave. Considering all these possibilities probably markets are trading in borrowed time now. On price charts it continues to trade positively hence trend remains up but like we mentioned earlier as well, it can change suddenly and without warning.
Happy Trading!
Market update: Nifty opened again with a 50 points gap at 11630 levels however dropped to 10575 levels before bouncing back again to 10620 levels. it closed at 10620 up 50 points.
Yesterday we had mentioned a possibility of Nifty making a double top at 11565 levels (if Nifty had fallen below 11500 levels) however since markets made a new high that probability is not valid now. Having said this the entire move from lows of 10600 is getting over stretched and appearing to be in its final leg since quite a while now ( In our wave count we are counting it as wave 'C' of ABC of second corrective). Let me explain.
lets analyze wave count of recent move from 10585 to 11630 (todays high)
Wave 1= 10585 to 10880 = ~300 points and took 4 days
Wave 2 =10880 to 10730 = ~150 points (high point of wave 2 was 10930 as it was an irregular correction, so the fall could be measured as 200 points too but that doesnt matter)
Wave 3= 10730 to 11560 = ~830 points ( ~278% of wave 1)
Wave 4= 11560 to 11320 = ~240 points
Wave 5= 11325 to 11630 = ~300 points & has taken 4 days as well ( matches wave 1)
Usually wave 5 matches with wave 1 especially if its part of overall corrective pattern ( wave 5 of wave C).This can also be read as final leg of final leg.
There is no doubt that markets are in a uptrend however evidence after evidence are piling up that a serious correction can begin any time. Market remains euphoric, over bought and seeing strong negative divergences on multiple indicators ( daily RSI etc). Many feel that Nifty is already done with the correction ( fall we saw last week when Nifty fell to 11320 levels) however it was too small and too shallow to be called as a full correction of entire wave. It may be a correction for one of the inner wave of the move (wave 3) but the entire move has still not been corrected and a fall is still pending and overdue now.
In any trend retail traders or the common man is usually the last one to enter ( wave 5) and that's when the trend ends, if our wave count is correct then wave 5 is ongoing ( and achieved similarity with wave 1 today) and last 3-4 days markets is seeing lots of euphoria and optimism which could be a sign of common man entering now hence there is good chance of this move getting over (for now).
Coming back to entire move from lows of 10k (Sep last year) to 11630, the total time has reached around 276% now ( which is rare). Though we did see some correction exactly from 261.8% levels it was still part of the ongoing move only and the total corrective move still continues. Now crossing 261.8% is not common and but still within rules of Neo wave. Considering all these possibilities probably markets are trading in borrowed time now. On price charts it continues to trade positively hence trend remains up but like we mentioned earlier as well, it can change suddenly and without warning.
Happy Trading!
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