Nothing new to add to yesterday's post.
New Price-tops accompanied by RSI divergence have become the order of the day.
EW wise 5445 is the stop-loss for the current labels. When and how to use this stop-loss is anyone's discretion.
EOD 23.08.2012
While new price tops were being formed with negative RSI divergence and the trendline support was giving way as shown in the chart above----it was clear that a fall will come sooner or later.It did come but only after breaching 5445. I had my doubts and that is why had mentioned in the morning that use 5445 at your own discretion.I had the confidence,based more on TL break and neg divergence and less on EW,so booked out of my shorts only partially.
Now coming back to our EW labels
Upmove from 5033 was being seen as
5032.4-5149.95=117.5
5149.95-5077.5=72.45
5077.5-5234.55=157.05(less than 1.618 so not extended)
5324.55-5154.05=70.5
5154.05-5448.45*=294.4(taken as extended 5th)
(i)=5154.05-5246.35=92.3
(ii)=5246.35-5164.65=81.7
(iii)=5164.65-5377.6=212.95(230% of (i)
(iv)=5377.6-5294.1=83.5
(v)=5294.1-5448.45*=154.35(167%)
And it has made these labels untenable as both the 3rd and 5th can not be extended.
While I try to come up with a fresh EW perspective, I wish to share following charts showing an important trendline break as well as the respect that has been consistently shown to channels:
.png)
.png)
The decisive looking breach of trendline alongwith EW labels invalidation gives me a reason to believe that the weakness shown in today's afternoon session may not get converted into a bigger retracement and once the overbought Hour RSI cools off,we may begin the upward journey again to test the channel shown above on the upside.
And the above mentioned probability can be best followed by observing the following two channels---both showing the upmove from 5033 onwards--5 minute line charts.
.png)
And although we made a lower low today vis-a-vis yesterday but now I am less bearish and viewing today's downmove as a smaller degree corrective abc with
a=5448.45-5394=54.45
b=5394-5420.85*=26.85
c=a would mean5365-5370 levels(assuming b ended here itself)
.png)
In any case the long t/f trendline(joining 6339-5630-----) currently around 5365-70 levels would also act a a crucial support.
While this smaller degree abc may get morphed into a larger degree Corrective but as of now I am not hoping for that.
New Price-tops accompanied by RSI divergence have become the order of the day.
EW wise 5445 is the stop-loss for the current labels. When and how to use this stop-loss is anyone's discretion.
While new price tops were being formed with negative RSI divergence and the trendline support was giving way as shown in the chart above----it was clear that a fall will come sooner or later.It did come but only after breaching 5445. I had my doubts and that is why had mentioned in the morning that use 5445 at your own discretion.I had the confidence,based more on TL break and neg divergence and less on EW,so booked out of my shorts only partially.
Now coming back to our EW labels
Upmove from 5033 was being seen as
5032.4-5149.95=117.5
5149.95-5077.5=72.45
5077.5-5234.55=157.05(less than 1.618 so not extended)
5324.55-5154.05=70.5
5154.05-5448.45*=294.4(taken as extended 5th)
(i)=5154.05-5246.35=92.3
(ii)=5246.35-5164.65=81.7
(iii)=5164.65-5377.6=212.95(230% of (i)
(iv)=5377.6-5294.1=83.5
(v)=5294.1-5448.45*=154.35(167%)
And it has made these labels untenable as both the 3rd and 5th can not be extended.
While I try to come up with a fresh EW perspective, I wish to share following charts showing an important trendline break as well as the respect that has been consistently shown to channels:
.png)
.png)
And the above mentioned probability can be best followed by observing the following two channels---both showing the upmove from 5033 onwards--5 minute line charts.
.png)
a=5448.45-5394=54.45
b=5394-5420.85*=26.85
c=a would mean5365-5370 levels(assuming b ended here itself)
.png)
In any case the long t/f trendline(joining 6339-5630-----) currently around 5365-70 levels would also act a a crucial support.
While this smaller degree abc may get morphed into a larger degree Corrective but as of now I am not hoping for that.
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