By Waves Strategy Advisors, For more information visit www.wavesstrategy.com
Price action over past 7 days might be frustrating for many of the traders as Nifty has been moving within the range of 5750 and 5900 but with Gaps. However we have been constantly mentioning the important support and resistance levels along with the Time frame the current corrective action can take since 4th July 2013 onwards.
On 4th July 2013, we mentioned that “Wave i took 3 days from 5600 to 5900. Currently, prices are moving down in the form of wave ii and has taken 2 days so far but retraced only 38.2% of up move. This Time analysis suggests that the medium term trend remains positive. As wave i have taken 3 days we can expect wave ii to last for 3 to 9 days. Wave ii has already taken 2 days…….”
Nifty 60 mins chart: As shown on 4th July 2013
As of today 11th July 2013:
On 10th July morning we have mentioned that “Over past 5 trading sessions Nifty shows Gapping action on 4 days and each of these Gaps have been in opposite direction compared to the immediately preceding Gap. In this entire process the range of the market has been between 5760 and 5900. This is enough to explain that despite of Gaps of 30 – 40 points there is no net progress. Such actions are sufficient for frustrating many traders who will probably now refrain from creating any positions. This is a typical behavior that a contracting market activity produces and just before the trend starts majority of the traders will give up on markets.”
In today’s morning report before market opened following was published “Prices are constantly testing 5900 levels on upside. The more number of times a level is tested the more chances for it to get broken. Also important supports or resistances are usually taken out with Gaps. It will be important to see if even this time the same thing happens. Also big Gaps do not provide opportunity for traders on sidelines to enter but aggressive traders can………
Time perspective:The up move from 5600 to 5900 was only 3 days affair and to maintain the degree balance the current corrective move can last for 9 days. So we have maximum of 2 more days of correction possible. We think Nifty should start an upmove either today or by tomorrow.Timewise the correction is approximately 2.5 * wave i and we have seen before that normally wave ii is around 2.5 to 2.618 times wave i from Time perspective.
……..as mentioned before the activity of October 2011 was very similar and the consolidation area was taken out with a big Gap up. Similar behaviour can be expected if markets are indeed Fractal!”
We have been very accurate in mentioning the range of 5900 to 5750 from the very day correction started and market has taken out 5900 today itself and that too with a GAP.
There is more indepth analysis of Indian markets in “The Financial Waves Short term update”research reportpublished on daily basis. Charges for this equity research is INR 2000 and the subscription can be done directly from http://wavesstrategy.com/payment For more information write to us at helpdesk@wavesstrategy.com or call on +91 22 28831358 / +91 22 9920422202
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