Expectedly a day with small trading range.
But waves have made pattern.
One was pretty clear:
5541-5509=32
5509-5522=13
5522-5484=38
Thus one set of ABC is quite easily identifiable by 11.40 am.
This was the easy part.
After that two possiblities are there:
i)Either the upmove from 5484 is a part of X(3 wave) to be followed by another set of ABC to the down; OR
ii)a five wave Impulse upwards(of small degree) had begun to take us beyond 5541;
And the whole day was played without giving much clarity on this account.
And it is only now that I am inclining myself to one option. First lets look at the rejected one:
As sw3<1.618*sw1 so a 5 wave form has to be rejected in favour of a 3 wave zig-zag X.
As shown below:
So tomorrow my preferred trade would be to go short with a SL at 5531.Target should be first 5460 and then 5427.
A word of caution though,if we donot go below the low of sw2(i.e.5488)we may be in for a DIAGONAL whose last arm up would do more than sw3(=43): Foxy waves,we have to remain alert at all steps.
Raghu
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