Hello Traders,
NIFTY50 closed the week at 10030 after making a low at 10004. N50 is approaching the target area at 10K-9878!
I have visualized the highs that Major Indexes in India have shown in the past weeks.
As you will observe, N50 topped on Aug 28. One day later, SENSEX made his top. While N200 topped out on Sept. 3, NIFTY IT complete the quartet on Sept. 25! More important to my view is the fact, that the “I Shares S&P India Nifty50 Fund” make it´s top for months back in January 29, in unison with the DJIA, as this Index made it`s wave 3 of (5) high. As we know now, the DJIA has topped at 26951.60 on Oct.18!
None of the India Indexes has come right close to their respective tops, and still decline in unison to fresh new lows. More or less clear, it is likely to count all declines as a "five-down", which is wave 1 of higher degree or a wave "A" of a ZigZag pattern. Both ideas will lead to fresh new lows, may after a countertrend pullback, that will retrace 0.382 - 0.618 Fibonacci of the first leg down.
As for now, you will observe at N50, this Index is penetrating the lower boundary line of the trend-channel which is formed by connecting the low at October 08, 2008 and the low of Feb.29,2016. At 9958.55 a wave ((iv)) of lesser degree is placed and a common target for this corrective move down. The Index will retrace a .382 Fibonacci of wave 4 (Minor degree) at 9877.91. So, these are the targets which I have mentioned before.
An alternate scenario is shown by the labels below the chart and still possible. The facts are not right clear which one is to favor, but to my view it is still clear that the Index is declining still to lower prices, maybe after a corrective setback or in a panic sell-off by Investors.
The a/d-Ratio for September 2018 shows a Ratio of 0.56 which is the lowest since June 2011! This low at the Ratio occurs just at the middle of a month’s long decline within a wave “2” setback, that leads to 4531 (monthly basis) for N50. Thereafter the huge advance took place. The daily TRIN (ARMS Index) was at 1.44 at Fridays closing bell. This level indicates “oversold” Market conditions. For now, there is now “panic” to observe by Investors. To my view, a TRIN measure at levels well above 2 will indicate this!
But more important and much more dangerous is the fact, that the TRIN (SMA10) is quite now, after this step decline, just at “overbought” levels (@.86) which indicate that there is much more room for N50 to decline lower still! Short-term there is not much new to add, so the open targets are still valid, marked with the rectangle at chart. The daily a/d-Ratio was at 0.48 at Fridays close, still not the level that support a bottom in a decline.
As before. Just a “five-up” will set the stage for a countertrend to ~10700 area, where a wave 4 of lesser degree topped. One possible target for a pullback could be around 10599. But it is to early to judge for this scenario.
Have a greatw week....
ruebennase
Feel free to ask or comment.
Trading this analyze is at your own risk!
Data’s are taken from www.nseindia.com and www.traderscockpit.com
NIFTY50 closed the week at 10030 after making a low at 10004. N50 is approaching the target area at 10K-9878!
I have visualized the highs that Major Indexes in India have shown in the past weeks.
As you will observe, N50 topped on Aug 28. One day later, SENSEX made his top. While N200 topped out on Sept. 3, NIFTY IT complete the quartet on Sept. 25! More important to my view is the fact, that the “I Shares S&P India Nifty50 Fund” make it´s top for months back in January 29, in unison with the DJIA, as this Index made it`s wave 3 of (5) high. As we know now, the DJIA has topped at 26951.60 on Oct.18!
None of the India Indexes has come right close to their respective tops, and still decline in unison to fresh new lows. More or less clear, it is likely to count all declines as a "five-down", which is wave 1 of higher degree or a wave "A" of a ZigZag pattern. Both ideas will lead to fresh new lows, may after a countertrend pullback, that will retrace 0.382 - 0.618 Fibonacci of the first leg down.
As for now, you will observe at N50, this Index is penetrating the lower boundary line of the trend-channel which is formed by connecting the low at October 08, 2008 and the low of Feb.29,2016. At 9958.55 a wave ((iv)) of lesser degree is placed and a common target for this corrective move down. The Index will retrace a .382 Fibonacci of wave 4 (Minor degree) at 9877.91. So, these are the targets which I have mentioned before.
An alternate scenario is shown by the labels below the chart and still possible. The facts are not right clear which one is to favor, but to my view it is still clear that the Index is declining still to lower prices, maybe after a corrective setback or in a panic sell-off by Investors.
The a/d-Ratio for September 2018 shows a Ratio of 0.56 which is the lowest since June 2011! This low at the Ratio occurs just at the middle of a month’s long decline within a wave “2” setback, that leads to 4531 (monthly basis) for N50. Thereafter the huge advance took place. The daily TRIN (ARMS Index) was at 1.44 at Fridays closing bell. This level indicates “oversold” Market conditions. For now, there is now “panic” to observe by Investors. To my view, a TRIN measure at levels well above 2 will indicate this!
But more important and much more dangerous is the fact, that the TRIN (SMA10) is quite now, after this step decline, just at “overbought” levels (@.86) which indicate that there is much more room for N50 to decline lower still! Short-term there is not much new to add, so the open targets are still valid, marked with the rectangle at chart. The daily a/d-Ratio was at 0.48 at Fridays close, still not the level that support a bottom in a decline.
As before. Just a “five-up” will set the stage for a countertrend to ~10700 area, where a wave 4 of lesser degree topped. One possible target for a pullback could be around 10599. But it is to early to judge for this scenario.
Have a greatw week....
ruebennase
Feel free to ask or comment.
Trading this analyze is at your own risk!
Data’s are taken from www.nseindia.com and www.traderscockpit.com