By Vivek Patil
Inside the 2nd Corrective, the “a” leg was from 20th Aug to 25th Aug (last Tuesday. The recovery thereafter is marked as “b” leg corrective to the fall. We suspected that 2nd Corrective could develop as a Triangle. As per NEoWave, a Triangle is a 5-legged pattern marked as a-b-c-d-e, usually with a violent “a” leg.
All 5 legs of the Triangle are “non-Impulsive” label-3 patterns, making it a 3-3-3-3-3 structure. The “b” leg retracing more than 61.8% of “a” leg is a “preferred” event to prove that the fall, though “violent”, was actually a “non-Impulsive” label-3 pattern.
Inside a 5-legged Triangle, 3 out of 4 retracing legs should retrace minimum 50% of their preceding legs. Our “b” has already retraced 50% of “a”, but we’d prefer it to retrace more than 61.8% to be confident about the Triangle.
For digesting the “violence” in its “a” leg, Triangle requires 4 more legs, holding the bottom of “a” leg, before the Triangle is completed. In theory, Triangle is all about holding the lows made by the initial violent fall.
Triangle consists of “contracting” action, wherein e < c < a, and d < b. We can continue to assume the Triangle if “c” remains “smaller” than “a”, even if it breaks the bottom of “a” marginally.
If the Index fails to take out the 61.8% level of 26947 (Nifty 8183), and starts closing below its previous day, then the development after “x” could fit into definition of a Zigzag, wherein “b” retraces less than 61.8% of “a”, and “c” breaks the low of “a”.
Full article at http://content.icicidirect.com/ULFiles/UploadFile_2015831112240.asp
Inside the 2nd Corrective, the “a” leg was from 20th Aug to 25th Aug (last Tuesday. The recovery thereafter is marked as “b” leg corrective to the fall. We suspected that 2nd Corrective could develop as a Triangle. As per NEoWave, a Triangle is a 5-legged pattern marked as a-b-c-d-e, usually with a violent “a” leg.
All 5 legs of the Triangle are “non-Impulsive” label-3 patterns, making it a 3-3-3-3-3 structure. The “b” leg retracing more than 61.8% of “a” leg is a “preferred” event to prove that the fall, though “violent”, was actually a “non-Impulsive” label-3 pattern.
Inside a 5-legged Triangle, 3 out of 4 retracing legs should retrace minimum 50% of their preceding legs. Our “b” has already retraced 50% of “a”, but we’d prefer it to retrace more than 61.8% to be confident about the Triangle.
For digesting the “violence” in its “a” leg, Triangle requires 4 more legs, holding the bottom of “a” leg, before the Triangle is completed. In theory, Triangle is all about holding the lows made by the initial violent fall.
Triangle consists of “contracting” action, wherein e < c < a, and d < b. We can continue to assume the Triangle if “c” remains “smaller” than “a”, even if it breaks the bottom of “a” marginally.
If the Index fails to take out the 61.8% level of 26947 (Nifty 8183), and starts closing below its previous day, then the development after “x” could fit into definition of a Zigzag, wherein “b” retraces less than 61.8% of “a”, and “c” breaks the low of “a”.
Full article at http://content.icicidirect.com/ULFiles/UploadFile_2015831112240.asp
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