The drop looks like 5 waves, assuming its the first leg of a larger ABC. So expecting a 3-wave B wave bounce to 0.5Fib to 0.618Fib (blue box)
Reasons for assuming 5 waves
1) Wave2 deep while wave is sideways and shallow
2) Wave4 rejected at channel bottom
Assuming 5th wave done with the bullish divergence on the RSI (blue line)
The move to 43k+...
A bull run is sustained as long as price holds above 200DMA (Daily moving average), but its retested (blue arrows) as in earlier runs. However, we NEVER had a weekly close candle below the 200DMA and the bull run continuing again.
As shown by the hammers in the chart, a weekly candle close below the 200DMA line in 2014, 2018, 2019, 2020 marked the end of a bull...
In an uptrend, index needs to be over 50DMA (orange)
In 2019 rally, 50DMA was not retested
In March, 2020 rally, 50DMA was briefly lost
In a downtrend, index will drop below, retest and get rejected from 50DMA
50DMA lost in July 2019, retested 2 times in July and August
50DMA lost and retest failed in March 2020 crash
Index needs to drop below 200DMA...
- Rejection from 0.618 + Resistance cluster above $440
- 0.5Fib failed to as support and now flipped to resistance
- Expect drop to 21WMA + S/R support
- losing above 21WMA support then target eventually drop to Green support cluster
Bias change if 0.5Fib line ($360) becomes support
The bounce from the lows looks like a (B) wave of a larger FLAT correction, also seeing 1:1 of the internal sub-waves and confined to a channel. The (C) wave can play down as an impulsive 5 waves
Confirmation: We need to go below 50WMA just below 11,000
Target 1: 8500 (C is 0.618x of A)
Target 2: 7000 (C = A)
From fundamentals perspective,
India had the worst...
At a first glance, this entire move looks like an ABC where A= C. The price also rejected hard from the red resistance zone, if the current support level is lost (this is the confirmation for this idea) , I expect the correction till below 2 targets
RSI weekly was heavily oversold and if it breaks blue channel, expect a sell of
The count is tricky with this, on one hand we got a 1:1 mapping from the march bottom, making this drop the first leg of downtrend
But I'm going with this current bullish count assuming the trend remains intact
All the best
This 3rd attempt to breakout from the downtrend red channel is rejected again, also confluence of 0.618Fib resistance
Expect a move to 50WMA and losing that to channel median line
RSI lost support as well
The idea is simple, above 200DMA you expect a rally and below it a correction, previous instances are circled in blue. Even if you are chopped up by sideways movement, eventually you will catch the big trend move
Also considering the sideways consolidation, I consider price staying above median line will take it to channel top, so now we are seeing resistance at...
Considering that we are possibly done with 5 waves, the drop is assumed to be an ABC and it also forms a Head and Shoulder pattern whose minimum target is $307
Invalidation: $410 (B top)
Confirmation: Below $375
Target 1 : $335 - 0.382Fib + A=C
Target 2: $310 - 0.5Fib + HnS target + C = 1.618x of A
All the best
In an uptrend, the corrections drop to take support (red arrows) at prev consolidations (green boxes) and then resumes the trend. Now, after 3 successful supports, the current consolidation has failed to support the drop in price and likely will now offer resistance
This could be a sign of trend reversing and logical move would be to drop to the next green...
XLM is one coin where I believe the bear market is over and I posted as such at the bottom in March. Note how the price broke out of the red channel, retested it (yellow wave4) and bounced hard. Just textbook
However, every rally needs to correct and I believe the 1st macro wave of a new bull cycle...
Considering the entire move up to as Wave (1) of a new cycle ad now we saw a drop to 0.618Fib for wave (2) correction Also bullish divergence on RSI
Invalidation: $120 (Below wave 1 start)
T1: $360 (in case ABC)
T3: $580++ (Min target for wave (3))
All the best!