Today's Nifty move was bulid on this Probability and we are in a 5 wave A form which has following labels:
And so our fractals for Corrective SW4 now stand as:
Wave A(5 wave from):
A1=4639-4708=69
A2=4708-4669=39
A3 in progress as a 5 wave;
Can be anything from 1.62*A1 to 4.25*A1 (i.e. from 112 to 294) so far:
(i)=4669-4771=102
(ii)=4771-4693=78
(iii)=4693-4859*=166(163%) thus A3 has covered 190 i.e 2.75*A1 and here we have to take help from classical TA as this (iii) has done the minimum 1.618*(i) prescribed by EW but max. limit mentioned in EW analysis says that it can go much further.
So lets come to the Daily Nifty chart:
While this upmove has breached all "preliminary " trendlines & channels shown in the chart,one resistance band of 4885-4915 is expected to "contain" this A of SW4.I suggest to all fellow readers not to take short positions in anticipation.
Raghu
Raghu ji,
ReplyDeleteQ
one resistance band of 4885-4915 is expected to "contain" this A of SW4
unQ
Can u please elaborate this line..
Thanks
Sekar
Dear Sekar,
ReplyDeleteEW is the best "Wave Pattern Defining" tool I know.However even after identifying the motive we have to struggle to find its destination as W3 can be 162-425% of W1 and C can be 62-160% of A. I find trendlines & momentum studies do act as handy guides to identify probable destination levels.
Now coming to your specific query, SW2(=5205-5326) of the current downmove from 5400 was 61.8% of SW1(=5400-5205).So SW4's most probable retracement percentage comes to 38.2% of SW3(=5326-4639=687)i.e around 4902.
And if you notice the Nifty moves of last 3 months,4885-4915 band had proved to be a good support levels in Nifty Daily & Weekly charts and therefore for any upmove this band has to now act as a resistance.