Hello Traders,
this morning NIFTY50 open the day with a massiv gap to 10327.60 and made it`s high for today just short after at 10343.60. Since than NIFTY is showing some weakness (not suprising..) and give some points of it`s advance back! Todays high was just some tics above the 0.618 RT of the last decline (10490.45 – 10094.20)!
This weakness is still to observe today at all Asia Markets as the Nikkei, the India Major`s and others! So, the question to me is, is this move today a countertrend push or the start of a new impulsive move to new ATH`s?
The obvious thing today is the massiv gap up, the second within the last trading hours. As long as this gap is not filled, the odds do increase that we have seen a „breakaway-gap“ with advancing price ahead. Maybe another gap up is to await.
If this move is a wave (i) of 3 any pullback that might occur has to stop above the level at 10147.51 (0.786 RT). It is allowed to retrace so deep, but the odds do decrease for a advance in an impulsive manner. In strong trending markets, as India is, it occurs that pullbacks are very shallow and retrace just only 0.38 of the last move, or may the 0.5 RT! To retrace 0.5 of the move, would imply that the gap will be closed, to retrace just the 0,38, means the gap remains open.
So while NIFTY50 closed today below the 0.618 RT shown at chart, we have different possibilities to watch.
Todays move is either wave a of b or it is wave 1 of a longer lasting advance to new ATH`s! Another possibilitie is, that todays top was wave b of an a-b-c pattern within a ZigZag-formation and the next hours and days will be focused to the downside. Notice that the pullback intraday can be count as a 3-move pattern within an a-b-c move and wave c is close to equal wave a (red trendline)! So maybe one moree down sequence is needed to complete this move and after that a move to the upside.
As I wrote on Monday, Oct. 13 there is a clear divergence for the Major Indexes as there is NIFTY50/200/500; SENSEX and NIFTY Bank. Since than, all Indexes show advancing moves, while NIFTY Bank is making new highs, not confirmed again by the other Major`s! As long as this divergence exist, there is a need for increased caution. This divergence will be eliminated from the market/traders and this could happen to both side`s, means, NIFTY Bank will decline and following the possibility that the short term advance at the Major`s are just a countertrend rally in a corrective phase or the Major`s will follow NIFTY Bank and make new ATH`s! For NIFTY Bank, daily timeframe, it is still possible to count the move from the probable wave ((2)) low as a 5-move pattern and a wave 1 of 3! The alternate count, to my view, is that the move from 23611 is just part of a wave „b“ move and after completing, we will get a wave „c“ decline!
Have a great weekend................
ruebennase
this morning NIFTY50 open the day with a massiv gap to 10327.60 and made it`s high for today just short after at 10343.60. Since than NIFTY is showing some weakness (not suprising..) and give some points of it`s advance back! Todays high was just some tics above the 0.618 RT of the last decline (10490.45 – 10094.20)!
This weakness is still to observe today at all Asia Markets as the Nikkei, the India Major`s and others! So, the question to me is, is this move today a countertrend push or the start of a new impulsive move to new ATH`s?
The obvious thing today is the massiv gap up, the second within the last trading hours. As long as this gap is not filled, the odds do increase that we have seen a „breakaway-gap“ with advancing price ahead. Maybe another gap up is to await.
If this move is a wave (i) of 3 any pullback that might occur has to stop above the level at 10147.51 (0.786 RT). It is allowed to retrace so deep, but the odds do decrease for a advance in an impulsive manner. In strong trending markets, as India is, it occurs that pullbacks are very shallow and retrace just only 0.38 of the last move, or may the 0.5 RT! To retrace 0.5 of the move, would imply that the gap will be closed, to retrace just the 0,38, means the gap remains open.
So while NIFTY50 closed today below the 0.618 RT shown at chart, we have different possibilities to watch.
Todays move is either wave a of b or it is wave 1 of a longer lasting advance to new ATH`s! Another possibilitie is, that todays top was wave b of an a-b-c pattern within a ZigZag-formation and the next hours and days will be focused to the downside. Notice that the pullback intraday can be count as a 3-move pattern within an a-b-c move and wave c is close to equal wave a (red trendline)! So maybe one moree down sequence is needed to complete this move and after that a move to the upside.
As I wrote on Monday, Oct. 13 there is a clear divergence for the Major Indexes as there is NIFTY50/200/500; SENSEX and NIFTY Bank. Since than, all Indexes show advancing moves, while NIFTY Bank is making new highs, not confirmed again by the other Major`s! As long as this divergence exist, there is a need for increased caution. This divergence will be eliminated from the market/traders and this could happen to both side`s, means, NIFTY Bank will decline and following the possibility that the short term advance at the Major`s are just a countertrend rally in a corrective phase or the Major`s will follow NIFTY Bank and make new ATH`s! For NIFTY Bank, daily timeframe, it is still possible to count the move from the probable wave ((2)) low as a 5-move pattern and a wave 1 of 3! The alternate count, to my view, is that the move from 23611 is just part of a wave „b“ move and after completing, we will get a wave „c“ decline!
Have a great weekend................
ruebennase