First the Hour chart:
A close below 5HrEMA is the first sign of downward momentum building up.
But it can be foxy as on the daily charts the Higher-high/Higher Low candle is telling us that on daily basis you should not be bearish at all so there was a clear-cut indication that Short positions SHOULD NOT be carried over to the next day.
Now let us have a look at the wave-pattern of very small degree(Intraday)that developed after making a top at 5606.65.
A of the Corrective ABC has done 5606.65-5545.6=61 so far
Now the important pivot point(EW wise)is
End of (i) at 5577.7
a tick above 5577.7 would tell us that A is over and B is in play.
As this Corrective ABC is likely to play out as a zig-zag(Indication being A having played a 5 w form), B can not go above 80% of A.
So if in the morning we open above 5577.7 then B upwards can do at the most 49 points i.e.5594.
So shorts should be developed around 5590-5594 levels with Stop-loss at 5607 and a target of 60 points (for C).
So EW wise the first move during the day would be in 5594-5530 range.
Therafter,the Momentum build-up would dictate the pattern.
And just remember: momentum over higher time frame(daily) has to be given more weightage than lower time-frame(Hourly) so advisable trade as of now remains Buy at dips.
A dip below 5480 ,however,would give more weight-age to a Corrective of higher degree having set-in and in that case donot hurry to go long.
Raghu
guruji,
ReplyDeletesuppose yesterday is the top u were looking for
(end of abc expanded flat and we dont get levels u mentioned ) then how to trade on short side
Dear Piyush,The only trade suggested here is short trade,though only for intraday play 5590-5530.And it has also been mentioned that only if Nifty goes below 5480 should one believe that Top has been formed.
Deleteok guruji,
Deletewhat i understand that once it breaks 5480 u'll start planning positional shorts
YES !!!
Deletethank u for ur reply guruji,
DeleteDearest Raghu ji,
ReplyDeleteOur wavez IMHO have been corrective........but at the smallest degree we will have an impulse......as every wave A needs to be either an impulse or LD
Since we are tracking an intraday chart on a standalone count........from 5606.xx
It is possible that the wave A is in progress..which will be followed by a B counter to A and then the C in the direction of A to complete the first ABC (where A = Impulse...B...Corrective and C...Dont know but either IM or ED......Especially since the the (iii) is over 161.8%.......qualifying for the lable of A(iii).
A (iv) may be over 5573 has room to go upto xxxx?
This xxxx can be figured out two ways.......IMHO and thought I'd share that with you
First the universally known............Fib %age........(iv) does 23.6-38.2% of (iii) and deeper in diagonalz.
This is pretty much simple.............
The other a valid confirmation that it is indeed (iv)......when it does not go beyond the Trendline connecting 5606.xx and the (ii) at 5601.xx (upper wave channel)
What the (iv) must do is......violate the lower channel which is placed parallel to the upper channel........from (i) at 5577.xx
The (v) then wud go beyond (iii) to end at
1) Either where the lower channel is or in power ful (v) go beyond the channel.
2) To guesstimate targets for powful (v) all we need to do is move the lower channel from (i) to (iii)....but only after (v) takes out the lower channel from (i).
There u go........Simple Channeling Technique......
plug this with the BEWO on a 140-150 bar time frame.........U wud have BEWO move below 0 at (i)......back up over 0 at (ii) and below 0 and below where (i) was to signal (iii) and back above 0........at (iv).....Often twice
and finally back below 0 with a POSITIVE DIVERGENCE between lows (iii) and (v)
When the whole thing plays out.......
Wave A......5606.xx-where ever it ends south of 5545.xx
followed by a corrective B.......Since in this case A is turning out to an impulse...........B cannot be FLAT or Triangle (for which only 3 waves are necessary).
B most likely a ZZ........violating the start of (i) and end of (ii) upper channel in 3 waves......simple abc zz
The C then be traded short side for decent gains.........from where the B ends.
If entered at B.....just north of the upper channel violation but below (i) at 5577.xx with SL a point above (ii) at 5601.xx
We can take partial gains at C=A*.62 (rain or shine).....Move SL on rest to C=A*.382 level.
Some more at C=A and move SL to C= 61.8-76.4*A
but if at C=A shows NEG divg....Strong bearish candle....then we book 100%
If price blasts thru the C=A zone.......We are looking at W3 instead of C
In this illustration.....assume (iv) ends at 5573.xx then the (v) can go 5573-59 = 5514
Followed by B.......50-80%.........lets assume 80%.....to 5587
C=A zone to watch out wud arrive around 5587-92 = 5495...........This is the zone we need to watch for price to blast below......GAP down or BIG RED Marubozu which impliez C declaring its intentio to morph into a W3.
If C shows charatectIZZtikz of ED....then we are likely to make NEW HIGHS.
IZZ information share karne ke badle mein EK peg aap ko pilaana padega......aur who moment hoga "JAB WE MET"
Juzz kidding about the peg. ^5
Foxy waves Guruji,
DeleteC did not even appear.
Thanx for input---as always.
:-)