Markets are open today for a truncated session where I would not be available.
But moving ahead, I see downfalls only in immediate term.Only point to be noticed is whether this down fall will be restricted to 5225 levels or go down further.If we go below 5132 then 5629 should remain the top for quite some time to come.
Probability 1
As a conservative trader,I would consider the current downmove from 5629 as W4 in following manner:
.png)
Deductive Reasoning at various levels has led me to label the dowmove so far as WXY.
How?
This W4 had to be a 3 wave form and it played a good 3 wave zig-zag from 5629-5268:
5629-5461=168
5461-5537=76(ending at 5521)
5521-5268=253(150%)
Now one probability is to see the action as in following chart:
.png)
In the chart above:
(i)5629-5461=168
(ii)5461-5537=76(ending at 5521)
(iii)5521-5268=253(150%)
(iv)5268-5459=191
(v) in progress and has to be extended as (iii) was not extended and so it would do 1.62*(i) minimum=5186
But that would mean W4 developing as a zig-zag (A=5629-5186=443;B retracing 62% to 5460 and then C going down by 443(=A) to 5017 level).
That would mean W4 retracing 5629-5017=612 i.e 59% of W3(=4588-5629=1041).
This kind of wave action would be more appropriate for a Corrective of higher degree and not for W4.
For a W4 that is likely to retrace upto 38.2% of W3 with sideways movement, more appropriate labels would be:
A(a 3 wave form) doing:
5629-5461=168
5461-5537=76(ending at 5521)
5521-5268=253(150%)
Then B retracing A in such a manner so as to develop into an ABC which could take form either of a Flat or of a Triangle.
But the retracement of 5629-5268 has done neither( for details please see my last week's posts).
So the only plausible labeling left for us is a WXY for W4 in following manner:
.png)
As Y.a has played out as a 5 wave form:
5459-5400=59
5400-5436=36
5436-5353=89
5353-5397=44
5397-5298=99
Y as a whole has to play out as a zig-zag with Y.b retracing at the most 80% of Y.a(=5459-5298=161) i.e. maximum 129=5427. (Though the ideal 61% has already been done).
As the pattern of Y.b played so far is not clear to me,I would advise remaining short or creating shorts at all rises with stop loss at 5427.
Y.c then should be playing downwards for minimum 0.62*Y.a=100 points.
or an ideal Yc=Ya=161.
If Y.b is already over at 5392,then minimum of Y.c would mean a target of 5297
Ideal Y has to end below W, so if we are not able to go below 5268,that would mean a failure and cause a fast & furious upmove as W5 going above 5629.
Below 5297 be cautious with your shorts--
Raghu
Probability 2 for agressive bears should ideally be discussed below 5186--- why hurry?
But moving ahead, I see downfalls only in immediate term.Only point to be noticed is whether this down fall will be restricted to 5225 levels or go down further.If we go below 5132 then 5629 should remain the top for quite some time to come.
Probability 1
As a conservative trader,I would consider the current downmove from 5629 as W4 in following manner:
.png)
Deductive Reasoning at various levels has led me to label the dowmove so far as WXY.
How?
This W4 had to be a 3 wave form and it played a good 3 wave zig-zag from 5629-5268:
5629-5461=168
5461-5537=76(ending at 5521)
5521-5268=253(150%)
Now one probability is to see the action as in following chart:
.png)
In the chart above:
(i)5629-5461=168
(ii)5461-5537=76(ending at 5521)
(iii)5521-5268=253(150%)
(iv)5268-5459=191
(v) in progress and has to be extended as (iii) was not extended and so it would do 1.62*(i) minimum=5186
But that would mean W4 developing as a zig-zag (A=5629-5186=443;B retracing 62% to 5460 and then C going down by 443(=A) to 5017 level).
That would mean W4 retracing 5629-5017=612 i.e 59% of W3(=4588-5629=1041).
This kind of wave action would be more appropriate for a Corrective of higher degree and not for W4.
For a W4 that is likely to retrace upto 38.2% of W3 with sideways movement, more appropriate labels would be:
A(a 3 wave form) doing:
5629-5461=168
5461-5537=76(ending at 5521)
5521-5268=253(150%)
Then B retracing A in such a manner so as to develop into an ABC which could take form either of a Flat or of a Triangle.
But the retracement of 5629-5268 has done neither( for details please see my last week's posts).
So the only plausible labeling left for us is a WXY for W4 in following manner:
.png)
As Y.a has played out as a 5 wave form:
5459-5400=59
5400-5436=36
5436-5353=89
5353-5397=44
5397-5298=99
Y as a whole has to play out as a zig-zag with Y.b retracing at the most 80% of Y.a(=5459-5298=161) i.e. maximum 129=5427. (Though the ideal 61% has already been done).
As the pattern of Y.b played so far is not clear to me,I would advise remaining short or creating shorts at all rises with stop loss at 5427.
Y.c then should be playing downwards for minimum 0.62*Y.a=100 points.
or an ideal Yc=Ya=161.
If Y.b is already over at 5392,then minimum of Y.c would mean a target of 5297
Ideal Y has to end below W, so if we are not able to go below 5268,that would mean a failure and cause a fast & furious upmove as W5 going above 5629.
Below 5297 be cautious with your shorts--
Raghu
Probability 2 for agressive bears should ideally be discussed below 5186--- why hurry?
guruji,
ReplyDeletei guess
"Y as a whole has to play out as a zig-zag with Y.b retracing at the most 80% of Y.a(=5459-5298=161) i.e. maximum 129=5527. (Though the ideal 61% has already been done)."
it shud be 5427 instead of 5527
Thanks for pointing out the typo--
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