Hello !
Referring to all my previous posts on NIFTY about a fall from 7730 zone for a new 52 week low and the resistance of the channel that i mentioned in one of my posts NIFTY DOWNTREND CHANNEL SINCE 9119 , On Wednesday NIFTY broke out of this channel which lied at 7780 for that day. It made a low of 7772.15 took support just at this level and advanced further for a close out of this channel at 7850.
This was the most important point to get confirmation that this move from 6825 till current 7850 is an impulsive wave and not a corrective one because only an Impulse Wave breaks out of a channel in which the correction takes place. What i was referring as per the wave counts, the overall correction from 9119 till 6825 as a Double zig zag i.e., ABC X(abc) ABC, so far, now clearly looks like a triple zig zag i.e., ABC X(abc) ABC X(abc) ABC unfolded and ended at 6825 (Refer the chart attached for clarity).
Does this means the correction started from 9119 has ended ?
The answer is YES it has. The reversal has happened from 6825 and the current uptick is an Impulse Wave 1
Well, this does not completes the whole story, does it ??? No
The correction from 9119 to 6825 is of 2294 points. This down wave is the fourth wave of this cycle.
Started from
WAVE 1: 27th October 2008 at 2252 to 6338 on 14th October 2010 - 4085 Points in 492 trading days
WAVE 2: 14th October 2010 at 6338 to 4531 on 20th December 2011 - (-) 1807 points in 277 trading days
Wave 2 being retracement of Wave 1 so 1807/4085 = 44% retracement
WAVE 3: 20th December 2011 at 4531 to 9119 on 4th March 2015 - 4588 Points in 797 trading days
Wave 3 is usually the longest both in time and points wise in this case it is 500 points more than Wave 1
Since Wave 3 cannot be the shortest impulse wave amongst 1, 3 and 5 so as of now assuming it to be the longest one. To ascertain Wave 5 in terms of points and time, the thumb rule of EW is if Wave 3 is the biggest amongst1,3 and 5 then 1 and 3 would approximately be equal in terms of points and time covered.
WAVE 4: 4th March 2015 at 9119 to 6825 on 29th February 2016 - 2293 points in 246 trading days
Wave 4 being tracement of Wave 3 so 2293/4588 = 50% retracement (exact)
Wave 4 is also approximately proportional to Wave 2 in terms of time covered.
WAVE 5: 29th February 2016 at 6825 to Range of 10900-11500 in last quarter of 2017 or first quarter of 2018
This upmove from 6825 so far estimated 7972-8025 zone is the First Wave of Wave 5 and has so far completed 1000 points and is on the verge of completion around 1200 points.
A correction is due of this First Wave and could be a for 2 to 3 months sideways correction till 7250-7200 zone on downside.
Happy Trading !
Referring to all my previous posts on NIFTY about a fall from 7730 zone for a new 52 week low and the resistance of the channel that i mentioned in one of my posts NIFTY DOWNTREND CHANNEL SINCE 9119 , On Wednesday NIFTY broke out of this channel which lied at 7780 for that day. It made a low of 7772.15 took support just at this level and advanced further for a close out of this channel at 7850.
This was the most important point to get confirmation that this move from 6825 till current 7850 is an impulsive wave and not a corrective one because only an Impulse Wave breaks out of a channel in which the correction takes place. What i was referring as per the wave counts, the overall correction from 9119 till 6825 as a Double zig zag i.e., ABC X(abc) ABC, so far, now clearly looks like a triple zig zag i.e., ABC X(abc) ABC X(abc) ABC unfolded and ended at 6825 (Refer the chart attached for clarity).
Does this means the correction started from 9119 has ended ?
The answer is YES it has. The reversal has happened from 6825 and the current uptick is an Impulse Wave 1
Well, this does not completes the whole story, does it ??? No
The correction from 9119 to 6825 is of 2294 points. This down wave is the fourth wave of this cycle.
Started from
WAVE 1: 27th October 2008 at 2252 to 6338 on 14th October 2010 - 4085 Points in 492 trading days
WAVE 2: 14th October 2010 at 6338 to 4531 on 20th December 2011 - (-) 1807 points in 277 trading days
Wave 2 being retracement of Wave 1 so 1807/4085 = 44% retracement
WAVE 3: 20th December 2011 at 4531 to 9119 on 4th March 2015 - 4588 Points in 797 trading days
Wave 3 is usually the longest both in time and points wise in this case it is 500 points more than Wave 1
Since Wave 3 cannot be the shortest impulse wave amongst 1, 3 and 5 so as of now assuming it to be the longest one. To ascertain Wave 5 in terms of points and time, the thumb rule of EW is if Wave 3 is the biggest amongst1,3 and 5 then 1 and 3 would approximately be equal in terms of points and time covered.
WAVE 4: 4th March 2015 at 9119 to 6825 on 29th February 2016 - 2293 points in 246 trading days
Wave 4 being tracement of Wave 3 so 2293/4588 = 50% retracement (exact)
Wave 4 is also approximately proportional to Wave 2 in terms of time covered.
WAVE 5: 29th February 2016 at 6825 to Range of 10900-11500 in last quarter of 2017 or first quarter of 2018
This upmove from 6825 so far estimated 7972-8025 zone is the First Wave of Wave 5 and has so far completed 1000 points and is on the verge of completion around 1200 points.
A correction is due of this First Wave and could be a for 2 to 3 months sideways correction till 7250-7200 zone on downside.
Happy Trading !
Hi Abhishek. What should be the trading strategy for this view. Pls elaborate. Thank .
ReplyDeleteSaharsh: Since this being an impulse wave currently,i would want advise a hedge,because we have to wait for this to end on top somewhere around 7972-8025 zone and wait for one fall,till then either hedge on index options or be stock specific
DeleteHi Abhishek. What should be the trading strategy for this view. Pls elaborate. Thank .
ReplyDeleteSir it would be of great help to ur readers if u can give views for this week only as we are very small traders, cant understand this much long Theory sir
ReplyDeleteNeeraj: I do agree that usually people don't want the whole picture,specially a trader,because i have been myself a trader and still am,but still it is important to understand the whole picture before entering into a trade.As a trading call i would want to be stock specific. SELL INFY with a SL of 1250 for a target of 1200.
DeleteIt seems nifty has become invincible!!! Kabhi neeche hi nahi aa raha sir.
ReplyDeleteNeeraj: I would update on my previous posts....doing some re-calculations over the weekend.
DeleteSir saw ur sell call on bn today,would also appreciate if u could give ur view on nifty.
ReplyDeleteNeet: Yes, i would do both for NIFTY and BANKNIFTY,just re-calculating something to update further on my previous post.
DeleteSir, good evening, BN still not closed above 16740. Hope the view remains intact. Holding shorts for May.
ReplyDeleteARUN VIJAYAN: Yes BN level holds good as of now i.e., 16740.....would update my previous post for both NIFTY and BANKNIFTY...after i do some re-work on the calculations over the weekend...i may ask you to exit the current position and wait for some more time.
DeleteY so sir,u think can market stretch more.if yes den wat abt d shorts n can v get d exit level .
ReplyDeleteNeet: I think Yes,markets may stretch more,would update everything before monday morning trading hours.
DeleteOk sir thanx
ReplyDeletePls update on nifty as well.
ReplyDeletePls update on nifty as well.
ReplyDeleteSaharsh Daga: Would cover both NIFTY and BANKNIFTY in next update before monday trading hours
DeleteOk sir, will exit on Monday.
ReplyDelete