Trading Nifty on 26-06-2012

One very basic EW question:
When to say that a 5 wave Impulse is over?
Idealmost answer is--- the channel would get broken and the retracement to 5 wave Impulse would go below subwave (iv) of Impulse in following manner:

However there may be a situation where channel gets broken,but subwave (iv) low is not breached, then how do we say that the Impulse is over?
Easiest answer to this is--- notice the length of (v),if it goes above the length of 1.62*(i) then also one can say that Impulse is over as two of the subwaves in Impulse can not be extended.

Thus we have three main criteria to pinpoint end of an Impulse:
1.Channel break;
2.Low of subwave (iv) getting breached;
3.Subwave labelled (v) goes above 1.62 of (i) to declare that it has been wrongly labelled and should be counted as subwave (i) of next Impulse instead of counting it as subwave (v) of first Impulse.

There may be times when (v) becomes complex and breaks the channel but unless it goes below the low of (iv) OR attains a length greater than 1.62*(i),it can not be said to be over.

Now ,with these understandings, let me take up the current Impulse from 4770 upwards:

So the first target for the downmove started today should be sub-5017.
And second target should be sub-4994.

There are however a few supports before these targets,indicated in charts below:

And of course,SL for shorts should be at 5202(corresponding to 1.62*128 from 4994)
If (iv) is taken at 5017,then stop-loss becomes 5224.

Raghu


PS: Whenever I write something like this,I can not help recalling my Guru WW @Wave Rider with whom I may have many differences in wave-labels but to whom I would always remain indebted--

8.40 AM
These are a few lines that I have drawn today as supports.
If  5041 holds today also,then I would not be surprised by an expiry at 5200 level---

10.30 AM

This channel is likely to be breached on the upside (to announce end of Impulse).
If it doesnot happen(meaning downward momentum is too strong)then use brekin down of day's low for shorting with SL at day's high


11.08 AM
Ideally breakdown of black channel or cross-over in MACD should be used for shoerting

An attempt to catch the top at top of black channel can be made but that may prove futile also

Ist condition of red-channel break on the upside done.
That confirms that at 5103 one Impulse got over(5195-5103=92).
From 5103 upwards ,a retracement is in play-- bound by black channel.

I hope this much of guidance is sufficient.
Let me get busy with my trades now---
:-)

1.43 PM
The channel should hold this 3x3x3 retracement:

3.04 PM

3.22 PM
Foxy waves have taken a turn.
sw2,supposed to be over at 5135,seems to have chosen to play an irregular flat:

This sw2.c is quite capable of going upto 5145.
Take positions accordingly.
sw3 has to wait till then----

EOD:
Sometimes,close & correct tracking of waves also does not prove much fruitful.
sw2a=5102-5134=32
sw2b=5134-5095=39(122%)
sw2c in play and that keeps probability of testing 5145 alive.