NIFTY50 2018-10-06...The result of overwhelming optimism!
Hello Traders,
NIFTY50 plunged this week -5.62%(according to teletrader.com) and set one of it`s worstest week for long. This is the result of overwhelming optimism and mentality and set the stage for a large correction.
Or in other words, as one reader wrote last week:“..look at the larger picture. ALL INVESTMENT DOLLARS are flowing into emerging markets especially INDIA> DO NOT SELL!!! BUY THE DIP. HUMONGOUS RALLY COMING INTO EOY.“
I have marked one off the key-comment in larger letter, to show what traders expactation has been!
This was also written nearly 600 points well above the price as it stand for now!
Maybe a huge rallly is coming, but how does it look for now?
Back to chart.
N50 crossed all my named targetzones and closed on Friday at 10316.45! It exceed in a possible wave (iii) to the 1.618 Fibonacci, which is a massiv extension and fits the idea of a fresh new impulse down. A pricetarget for a possible end of a wave 3 at any degree is the 2.618 Fib and it is at 10188.7 in this case. If N50 is likely to do this, than the decline is not done for now and need one more down sequence to complete.
After this a countertrend move is next to ccur. Either a wave 4 (within the impulsive case) or a wave „b“ in a corrective case! Both will set the stage for a new lower low after, may around the 10K zone, where the wave 4 of lesser degree is at 9951 from March 23! ( I have idealized the chart with red arrows for a possible countertrend..).
Gap`s, no matter if they are bullish or bearish occur often right at the middle of a move. So a another argument for a second leg is given by analysing the gap. If this comes into play, the targetzone is beneth the wave 4 low @ 9951, it is at 9881 area.
We will watch the market closely and judge if the pattern may is ending and will check for new chances.
Still the next argument for an ending advance is to oserve on a daily basis for NIFTY50! Here the possible wave ((V)) of 5 has pushed to a bit more than the .786 Fibonacci of the wave ((i)). A common target for a wave 5 in any degree is the 0.618-1-1.618 Fibonacci of the wave 1.
Because of the steepness off the decline and one open target at around the 10K zone I think we will test this area, and perfectly we can touch the lower boundary line off the uprising trendchannel.
It will be really interesting to see, how N50 and the other Major Indexes will perform next week.
Again, and this steps more into forefront: It is possible that a huge bull-market has endet at the 11760.20 and a Major bear market at high degree is underway and is in it`s first moves!
The alternate interpretation for N50 is, that a wave 4 (Minor) correction is underways. As you know, those kind of corrections often shows a flat or a triangle pattern, within the rule of alternation.
Be prepared for this and always one step at forefront to the market.
„Let the market commit to you...“ as one supperb Elliott waver and instructer always comment!
Have a great weekend...
ruebennase
Questions and Comments are welcome!
Note!---> This analys can be wrong. It is just in my view the one with the most probabiltity with the Data which are available to me and by my interpretation of the EW Theory. If you trade this it is done by your own risk and decision! Keep that in Mind!!!
Data by NSEIndia.com and teletrader.com!
NIFTY50 plunged this week -5.62%(according to teletrader.com) and set one of it`s worstest week for long. This is the result of overwhelming optimism and mentality and set the stage for a large correction.
Or in other words, as one reader wrote last week:“..look at the larger picture. ALL INVESTMENT DOLLARS are flowing into emerging markets especially INDIA> DO NOT SELL!!! BUY THE DIP. HUMONGOUS RALLY COMING INTO EOY.“
I have marked one off the key-comment in larger letter, to show what traders expactation has been!
This was also written nearly 600 points well above the price as it stand for now!
Maybe a huge rallly is coming, but how does it look for now?
Back to chart.
N50 crossed all my named targetzones and closed on Friday at 10316.45! It exceed in a possible wave (iii) to the 1.618 Fibonacci, which is a massiv extension and fits the idea of a fresh new impulse down. A pricetarget for a possible end of a wave 3 at any degree is the 2.618 Fib and it is at 10188.7 in this case. If N50 is likely to do this, than the decline is not done for now and need one more down sequence to complete.
After this a countertrend move is next to ccur. Either a wave 4 (within the impulsive case) or a wave „b“ in a corrective case! Both will set the stage for a new lower low after, may around the 10K zone, where the wave 4 of lesser degree is at 9951 from March 23! ( I have idealized the chart with red arrows for a possible countertrend..).
Gap`s, no matter if they are bullish or bearish occur often right at the middle of a move. So a another argument for a second leg is given by analysing the gap. If this comes into play, the targetzone is beneth the wave 4 low @ 9951, it is at 9881 area.
We will watch the market closely and judge if the pattern may is ending and will check for new chances.
Still the next argument for an ending advance is to oserve on a daily basis for NIFTY50! Here the possible wave ((V)) of 5 has pushed to a bit more than the .786 Fibonacci of the wave ((i)). A common target for a wave 5 in any degree is the 0.618-1-1.618 Fibonacci of the wave 1.
Because of the steepness off the decline and one open target at around the 10K zone I think we will test this area, and perfectly we can touch the lower boundary line off the uprising trendchannel.
It will be really interesting to see, how N50 and the other Major Indexes will perform next week.
Again, and this steps more into forefront: It is possible that a huge bull-market has endet at the 11760.20 and a Major bear market at high degree is underway and is in it`s first moves!
The alternate interpretation for N50 is, that a wave 4 (Minor) correction is underways. As you know, those kind of corrections often shows a flat or a triangle pattern, within the rule of alternation.
Be prepared for this and always one step at forefront to the market.
„Let the market commit to you...“ as one supperb Elliott waver and instructer always comment!
Have a great weekend...
ruebennase
Questions and Comments are welcome!
Note!---> This analys can be wrong. It is just in my view the one with the most probabiltity with the Data which are available to me and by my interpretation of the EW Theory. If you trade this it is done by your own risk and decision! Keep that in Mind!!!
Data by NSEIndia.com and teletrader.com!