Pre-Market View:
I had mentioned in my EOD update yesterday
Q
As Diagonal=5548.65-5638.2=89.55
Corrective=5638.2-5593.55=44.65
Impulse(mimimum)=0.618x89.55=55.35=5648.9 was missed by a whisker as Nifty made a high of 5647.4
UnQ
And got a message from my friend from Chennai--Vignesh Siva-- that nseindia website shows day's high at 5649.2 And it indeed does.Something that my ichart's chart didnot show.
That means the basic minimum for the zig-zag from 5548 was done with
A (diagonal)=5548.65-5638.2=89.55
B(Flat)=5638.2-5593.55=44.65
C(Impulse)=5593.55-5649.2=55.65 but is the C over??
It cannot be answered at this moment as C can do 0.618 to 1.617 of A
May be C has done only C1=5593.55-5649.2=55.65 and C2=5649.2-5623.45=25.75 and C3 (if extended) may do 1.62x55.65=90.15=5714-----
And only when Nifty starts trading below the red TL ,we may say that zig-zag may be over(though it wd be confirmed only below 5593).
While the EW labels mentioned represent only two of the many Probabilities---developing wave may unfold itself in several other ways as well---- red TL assumes significance as its breach would be the first indication of the upmove losing steam.
50DMA at 5657 is a significant resistance---opening and trading above it would indicate strength in Nifty.
EOD Post:
As the opening was above 50DMA--it was an easy & profitable day for longs.
The median illustrated in the chart above and EW labels
A (diagonal)=5548.65-5638.2=89.55
B(Flat)=5638.2-5593.55=44.65
C(Impulse)=5593.55- upwards by (upto) 1.617*A=144.8 gave a maximum target of 5738.35 for this C.
And now 5739 has become the Stop-loss for the shorts which might have been created by those who follow these labels.
As I had mentioned ealier also,as A had played out as diagonal, C had to be a fast & furious Impulse. For academic purposes,we may look for 5 subwaves within this Impulse C:
However this copy-book form of Impulse having 5 well-defined subwaves is not a necessity and the way we came close to 5738, it may have already seen its top.
Hour charts have become overbought and 5 min charts are showing negative divergence.
But Daily charts are showing 5/10DMA bullish cross-over and MACD 12,26 is also about to show that:
Probability 2
Would come into play if 5739 is breached upwards and envisages breaching 5778 but not 5815.
X is seen as an Expanded Flat wherein:
Xa=5583-5777=194
Xb=5777-5548=229(118%)
Xc=5548-5733* in play:
One can easily argue that depending upon the form of the downmove 5777-5548 one can easily choose a preferred Probability--- as it boils down to calling it Ya(Impulsive) or Xb(Corrective)--- but call it my shortcoming or markets foxiness,I am not able to choose one.
So I have left it on the markets to announce it---- if 5739 remains unbreached, Probability 1 should be followed otherwise Probability 2.
I had mentioned in my EOD update yesterday
Q
As Diagonal=5548.65-5638.2=89.55
Corrective=5638.2-5593.55=44.65
Impulse(mimimum)=0.618x89.55=55.35=5648.9 was missed by a whisker as Nifty made a high of 5647.4
UnQ
And got a message from my friend from Chennai--Vignesh Siva-- that nseindia website shows day's high at 5649.2 And it indeed does.Something that my ichart's chart didnot show.
That means the basic minimum for the zig-zag from 5548 was done with
A (diagonal)=5548.65-5638.2=89.55
B(Flat)=5638.2-5593.55=44.65
C(Impulse)=5593.55-5649.2=55.65 but is the C over??
It cannot be answered at this moment as C can do 0.618 to 1.617 of A
May be C has done only C1=5593.55-5649.2=55.65 and C2=5649.2-5623.45=25.75 and C3 (if extended) may do 1.62x55.65=90.15=5714-----
While the EW labels mentioned represent only two of the many Probabilities---developing wave may unfold itself in several other ways as well---- red TL assumes significance as its breach would be the first indication of the upmove losing steam.
50DMA at 5657 is a significant resistance---opening and trading above it would indicate strength in Nifty.
EOD Post:
As the opening was above 50DMA--it was an easy & profitable day for longs.
A (diagonal)=5548.65-5638.2=89.55
B(Flat)=5638.2-5593.55=44.65
C(Impulse)=5593.55- upwards by (upto) 1.617*A=144.8 gave a maximum target of 5738.35 for this C.
And now 5739 has become the Stop-loss for the shorts which might have been created by those who follow these labels.
As I had mentioned ealier also,as A had played out as diagonal, C had to be a fast & furious Impulse. For academic purposes,we may look for 5 subwaves within this Impulse C:
Hour charts have become overbought and 5 min charts are showing negative divergence.
But Daily charts are showing 5/10DMA bullish cross-over and MACD 12,26 is also about to show that:
EW wise two Probabilities are staring at us:
Probability 1
Is being mentioned for quite sometime now and calls for shorting at current levts with a SL of 5739 and targets upto 5365:
Would come into play if 5739 is breached upwards and envisages breaching 5778 but not 5815.
X is seen as an Expanded Flat wherein:
Xa=5583-5777=194
Xb=5777-5548=229(118%)
Xc=5548-5733* in play:
One can easily argue that depending upon the form of the downmove 5777-5548 one can easily choose a preferred Probability--- as it boils down to calling it Ya(Impulsive) or Xb(Corrective)--- but call it my shortcoming or markets foxiness,I am not able to choose one.
So I have left it on the markets to announce it---- if 5739 remains unbreached, Probability 1 should be followed otherwise Probability 2.
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