The 3rd gap-up, however, can prove as an “Exhaustion Gap” only if the same is covered, and Sensex starts trading below it. On Friday, Sensex was seen holding Thursday’s gap-up and indeed, recovering exactly from the gap-up in Friday’s 2nd half.
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The initial maturity sign could be provided when the Sensex starts hitting a “lower low”. Bias would turn -ve when it starts closing below its previous day’s low.
If and when “a” of 3rd matures, Sensex would open a downward “b” of 3rd. If “b” remains substandard price-wise/time-wise, and preferably holds the 2nd Weekly gap-up (last Monday’s gap-up), then it could suggest that 3rd Corrective would develop into a Diametric.
But if the “b”, if any, turns out to be a substantial down-move, and it also trades below the 2nd Weekly gap-up area, then such an action could suggest 3rd may develop as an Ending Triangle.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2017717103548.asp
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The initial maturity sign could be provided when the Sensex starts hitting a “lower low”. Bias would turn -ve when it starts closing below its previous day’s low.
If and when “a” of 3rd matures, Sensex would open a downward “b” of 3rd. If “b” remains substandard price-wise/time-wise, and preferably holds the 2nd Weekly gap-up (last Monday’s gap-up), then it could suggest that 3rd Corrective would develop into a Diametric.
But if the “b”, if any, turns out to be a substantial down-move, and it also trades below the 2nd Weekly gap-up area, then such an action could suggest 3rd may develop as an Ending Triangle.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2017717103548.asp
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