As shown in 2nd chart i.e. half hourly chart On friday sensex held thursday's low and formed a bull candle, when everybody was bearish.
It confirmed that earlier wave D inside bigger g leg of diametric. d leg can be considred as double combination, the pattern implication of this wave can be 80% As shown in above chart E leg started on friday, it can move 80% of D which is approximately 15837, also to keep extraction logic live, E leg needs to be less than C leg, so it should not move beyond 15890, if it is extraction triangle, sensex should immediately retrace E leg with faster retracement downwards. If E leg moves above 15890 or next leg does not retrace E leg faster, we can assume that diametric is forming which can have F & G leg after e ends. This small diametric would be G leg of bigger diametric. If it is a diametric sensex can move above 16k. The pattern implication of ending triangle of bigger F wave is around 16200 to 16500. generally last leg of any formation ( G leg of diametric in this case) itself forms the same formation.
As shown in daily chart the sensex is forming G leg On friday sensex took support exactly on line joining d-f to keep alive bull's hopes. G leg has already taken 10 days, earlier legs of this diametric have taken 11 to 18 days, if we consider that, sensex has till around 7 days to complete G wave. After G wave ends it needs to be seen whether this leg ends the rally or it is a running correction and rally continues which will prove bulls victorious.
Following points are in favour that after g the rally will end.
1. If you compare a, c, e leg of the diametric in daily chart, the rise is 1078 points per days, 171 points per day and 163 points per day respectively for g till now the rally is only 86 points per day only, this shows that Though sensex is forming new highs the strength of the rally is decreasing with each leg of thge diametric
2. The FIIs have started becoming sellers in last week.
3. Crude oil has fallen to $67 from $75.
To keep continuing the rally after g leg the above points need to be reversed.
No comments:
Post a Comment