NIFTY50....Several options possible? Wave (iii) in place?
Hello Traders,
N50 drops down during this week trading to 10138.60 ( a multi month lowà April 2018!!) and reversed sharply in Thursday`s and Friday’s session. It closed the week at 10472.50, (+1.51%, according to teletrader.com).
On a daily basis an interesting candlestick pattern is to observe. Within the last three days N50 shows 2 bullish candles which shows a bearish one at the middle of both. This bearish candle looks to me like a “inverted-hammer”, which is a reversal candle and possibly implies a consolidation or a change at trend.
After 5 weeks of declining prices from 11760.20 down to 10138.20 it is still the time for a reversal or a consolidation?
Let`s have a look what could be possibly next.
As I wrote before, N50 could end a long-term trend at 11760.20 and is just in a correction of larger degree.
The other opportunity is, that a wave 4 (Minor) correction is on the run, with targets around the 9900 area. So, in this case, the running move will be a sideways consolidation, which often takes the form of a flat or triangle pattern. Both are possibly and I need more facts to judge to one or the other.
The second count is the long-term run has ended and we`re in longer term correction after finishing a wave (5) (Intermediate). The potential is high for both and we will see really soon which one will step to forefront.
On a short term (60 min chart), N50 shows an interesting pattern by creating Gap`s and similar moves.
Let`s look to the opening bell on October 11 as N50 opens the door at 10174.90 with a massive Gap down. It was day`s low and N50 reversed sharply to 10316.25 at the close. After a corrective setback at the next day and a close at 10226.90, which retraced a bit more than 0.786 of the preceding wave one day before, the important fact occurs one day later, again at the opening. N50 gaped up to an open at 10322.15 and rose to 10477.40, some tics above the high two days before.
It is quite possible that this two Gap`s indicate an “island reversal”, one of those Acceleration Gap`s which occurs at even a reversal point of trend. A following Gap within the next hours to the upside will established this idea at a higher level of confidence and as long the low at 10138.20 is in place the trend is up. But, we need more evidence for this idea.
As I wrote often before, nothing will decline for ever, and nothing will rise for ever.
I have marked the 0.382 Fibonacci of the decline from 11523.25-10138.9 as important, because it either the end of a wave (iv) pullback or it will be the initial start for a Gap-close rally, which is open @10850.45 from October 3 rd!
And least, take notice of the a/d-Ratios as of the last three trading days. It jumps erratically between 9.5-0.22-11.50, which implies to me a really nervous change from weak into strong hands at Option traders, possibly.
Have a great week…
ruebennase
Notice: This analyze can be wrong. Trading this is for your own risk!
Feel free to ask or comment!
N50 drops down during this week trading to 10138.60 ( a multi month lowà April 2018!!) and reversed sharply in Thursday`s and Friday’s session. It closed the week at 10472.50, (+1.51%, according to teletrader.com).
On a daily basis an interesting candlestick pattern is to observe. Within the last three days N50 shows 2 bullish candles which shows a bearish one at the middle of both. This bearish candle looks to me like a “inverted-hammer”, which is a reversal candle and possibly implies a consolidation or a change at trend.
After 5 weeks of declining prices from 11760.20 down to 10138.20 it is still the time for a reversal or a consolidation?
Let`s have a look what could be possibly next.
As I wrote before, N50 could end a long-term trend at 11760.20 and is just in a correction of larger degree.
The other opportunity is, that a wave 4 (Minor) correction is on the run, with targets around the 9900 area. So, in this case, the running move will be a sideways consolidation, which often takes the form of a flat or triangle pattern. Both are possibly and I need more facts to judge to one or the other.
The second count is the long-term run has ended and we`re in longer term correction after finishing a wave (5) (Intermediate). The potential is high for both and we will see really soon which one will step to forefront.
On a short term (60 min chart), N50 shows an interesting pattern by creating Gap`s and similar moves.
Let`s look to the opening bell on October 11 as N50 opens the door at 10174.90 with a massive Gap down. It was day`s low and N50 reversed sharply to 10316.25 at the close. After a corrective setback at the next day and a close at 10226.90, which retraced a bit more than 0.786 of the preceding wave one day before, the important fact occurs one day later, again at the opening. N50 gaped up to an open at 10322.15 and rose to 10477.40, some tics above the high two days before.
It is quite possible that this two Gap`s indicate an “island reversal”, one of those Acceleration Gap`s which occurs at even a reversal point of trend. A following Gap within the next hours to the upside will established this idea at a higher level of confidence and as long the low at 10138.20 is in place the trend is up. But, we need more evidence for this idea.
As I wrote often before, nothing will decline for ever, and nothing will rise for ever.
I have marked the 0.382 Fibonacci of the decline from 11523.25-10138.9 as important, because it either the end of a wave (iv) pullback or it will be the initial start for a Gap-close rally, which is open @10850.45 from October 3 rd!
And least, take notice of the a/d-Ratios as of the last three trading days. It jumps erratically between 9.5-0.22-11.50, which implies to me a really nervous change from weak into strong hands at Option traders, possibly.
Have a great week…
ruebennase
Notice: This analyze can be wrong. Trading this is for your own risk!
Feel free to ask or comment!