... maturity of rally indicated that upward “a” leg is over, and downward “b” leg has opened.The global cues over the weekend are extremely -ve. As a result, Index could open gap-down as we begin the fresh week. Last week was truncated (Monday was holiday). The fresh week will also be truncated (Tuesday will be holiday).
Last Tuesday, Index showed gap-up action. After Friday’s sell-off, while Sensex is holding above Tuesday’s gap-up area, both Nifty & Nifty Future are already testing their respective gap-up levels, indeed threatening to move below it with a gap-down open in the fresh week.
Therefore, if today’s action opens gap-down, and the same remains uncovered by the end of the week, then it could form into an “Island Reversal” pattern on the weekly charts of Nifty/Nifty Future, which is a pattern with -ve implications.
Structurally, we’ll initially consider the fall starting from Friday to be as “b” leg of 3rd Corrective.
Last week we argued that 3rd Corrective could develop as 7-legged Diametric or 5-legged Triangle. This was because the 1st as well as 2nd Corrective inside the larger “D” were both Diametric patterns.
By NEoWave, inside a Complex Corrective development (which we are assuming inside “D” from Feb’16), the progression of patterns should be from severe to same or lesser severity.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2016912114319.asp
No comments:
Post a Comment