Union Budget, RBI monetary policy,Petrol/Diesel Price hike --
How can the charts help us amongst all this--
I have always maintained that critical threshold limits are very well indicated by EW studies and one must keep an eye on these so as not to let any news overwhelm you and lead you to wrong direction.
Take the case of yesterday's trade, 5326 was the threshold to initiate the shorts which was not crossed so the longs live to see another fruitful day.
However, let me repeat, the EW pattern has set a broad limit of 5540 for the current upmove which would proceed in a 3 wave form.
So one must not get into out of the money options in anticipation.
I wish to reproduce the chart outlining the expected pattern in coming weeks:
.png)
And it is the highlighted 3 wave pattern in the chart that I am alluding to:
Let me call it ABC and we are currently in A of this 3 wave pattern.
Now where this A started from 5171 upwards would end?
In the absence of fractals( because of gap-up) not possible to pin-point the end of A.
But it is very much possible to pinpoint the outer limit of ABC (as a whole) and that is 80% retracement of 5629-5171 which comes at 5537.
Other aspects that are clear about this ABC are:
1.It would be a zig-zag form( as A is an Impulse);
2.C would not be as fast and furious so no gap-ups would be expected for C which may very well develop as a diagonal.
In any zig-zag,what is the maximum that an A can do?
And thus,donot try to guess where this A would end.
And remember,shorts would be playing for a B which may not be very large. So prudence demands,short only when we approach 5500.
Raghu
How can the charts help us amongst all this--
I have always maintained that critical threshold limits are very well indicated by EW studies and one must keep an eye on these so as not to let any news overwhelm you and lead you to wrong direction.
Take the case of yesterday's trade, 5326 was the threshold to initiate the shorts which was not crossed so the longs live to see another fruitful day.
However, let me repeat, the EW pattern has set a broad limit of 5540 for the current upmove which would proceed in a 3 wave form.
So one must not get into out of the money options in anticipation.
I wish to reproduce the chart outlining the expected pattern in coming weeks:
.png)
Let me call it ABC and we are currently in A of this 3 wave pattern.
Now where this A started from 5171 upwards would end?
In the absence of fractals( because of gap-up) not possible to pin-point the end of A.
But it is very much possible to pinpoint the outer limit of ABC (as a whole) and that is 80% retracement of 5629-5171 which comes at 5537.
Other aspects that are clear about this ABC are:
1.It would be a zig-zag form( as A is an Impulse);
2.C would not be as fast and furious so no gap-ups would be expected for C which may very well develop as a diagonal.
In any zig-zag,what is the maximum that an A can do?
And thus,donot try to guess where this A would end.
And remember,shorts would be playing for a B which may not be very large. So prudence demands,short only when we approach 5500.
Raghu
Dear Raghuji,
ReplyDeleteI would like to thank you for the great work you are doing through this blog. I have made about 25k on a capital of 50k in last 1 month following your blog.
It will be an honor if you can suggest how I can payback in some way.
Will look forward to your reply on srahul2107@gmail.com
HaHaHaHaHaHa---- maza aa gaya Rahul bhai.
ReplyDeleteJust do me a favour.
Make an FD in the name of your mother and keep taking out profits at monthly interval.
DONOT let the thought that "It is my profit and let me PLAY with it" overwhelm you at any point in time.
Always use a fixed amount as Trading capital and take out profits on weekly/monthly basis.
Sure Raghuji, will definitely adhere to the discipline which you and Nagraj have repeated on your blogs several times.
Deletenice work dude.......... the advance ew work make your blog more useful..... for quick view..
ReplyDelete