Upward march of Nifty continues,though the small degree corrective expected in the morning didnot occur.Now we have come quite close to the end of SW3 of C as seen below in EOD charts:
In the Expanded Flat ABC shown above,C can do upto 1.618*A thus a range got defined few days back,that the possibility of C doing 5276 is very much open.
This C has to pan out as a 5 wave form of which:
Sw1=4531-4800=269
Sw2=4800-4588=212
Sw3=4588-5141* has already done 205% of Sw1.
And here the significance of Momentum needs to be mentioned once again.
Theoretically Sw3 can do anything from 162% to 425% of Sw1.Indicaters like RSI start giving overbot/oversold signals as soon as the mimimum 162% is reached,prompting one to take a position in anticipation of reversal which most of the times causes lot of pain-- financial & mental.
Thus EW has to be seen alongwith Momentum & Trendline/Channel and 20/50/100/200DMAs and they provide probable levels of reversal.
Now lets see the Sw3=4588-5141* on Hourly chart and see how it has panned out so far:
The fractals of Sw3 as shown above are:
(i)=4588-4780=192
(ii)=4780-4687=93
(iii)=4687-4899=212
(iv)=4899-4827=72
(v)=4827-5141=314*(having done 163% of (i)
Thus Sw3 as 205% extension of Sw1 and having 5 wave internal fractals (which too have done minimum targets) looks now ready for a Sw4 retracement.
But when will it oblige?
I wish I could answer that.
Momentum has not given any signs of subsiding so far.Though the Sw3 channel line seems to be offering some resistance as shown above.
And also the lang term descending trendline is very close as shown below--around 5172.
Or will it be the 200DMA at around 5220?
Sw4 to the down,as and when it starts,is likely to do a 23.6% or 38.2% retracement of Sw3 as Sw2 was quite deep.
Raghu
Puj Raghuvanshi ji,
ReplyDeleteVery good and detailed post,
making things appear clear....Thank you
Regards,
Karjunan