| The rally from late June on Sensex developed into a clear 5 wave move up. An ending diagonal move has 3-3-3-3-3 pattern and a 5 wave move up forces us to reconsider our wave counts |
| Today's chart shows our revised wave count supported by 5 week ROC. As per elliott wave guidelines 3rd of 3rd waves should produce maximum momentum and we should see divergence between a 3rd wave and 5th wave of same degree. This is clearly visible in weekly chart as highlighted. Current count satisfies that guideline! |
| Another guideline says that Wave 4 is most likely a triangle. Wave 4 on Sensex is not a clear triangle but it is worth a consideration given the probable scenarios |
| The weekly chart shown throws light to some subtle points which requires serious consideration |
| Time has emerged as THE KEY ELEMENT in past few months. Market as a whole has not moved anywhere but if one could have timed the moves down and up correctly, would have earned some decent returns |
| The key observation to be made is the Time relation between Wave 2 and Wave 4. Wave 2 took approx 18 weeks to develop and Wave 4 took 32 weeks to develop i.e. 1.764 * Wave 1 |
| We have been constantly speaking about the importance of 76.4% in Indian markets for many months now. This level has now shown its importance not only in retracements, projections but even in Time relationships |
| We do not rule out the possibility of current wave 5 to extend further but given the global scenario and divergence of Indian Markets with Rupee the probability is low |
| Key things to observe: A steep correction in form of 5 waves, break of 17400 level with further negative confirmation by break of 16600 levels. This will confirm a correction of higher and intermediate degree! |
No comments:
Post a Comment