Nifty 50 IndexShort
Nifty view post prices reversing higher
Hey Everyone,
Update 9/12/2024
Markets witnessed nice short covering last 2 weeks. Many people think the correction is over and bull rally resumed. whats actually happening? Sharing my idea.
The actual head and shoulder correction is about to come and the correction is not over yet.
what we have actually seen is wave A of the correction and currently the up move is wave B correction of the corrective wave (ABC) which forms the end of right shoulder. Wave C downside is still pending.
The sequence of events
End of rally happens when valuations are too high and a correction is needed. (26300 levels)
1) Starts to dump which we witnessed in wave A correction of FII selling. ( increased volume in
cash market and rise in implied volatility in options market)
2) Then comes the wave B opposite to wave A where everyone thinks the correction is over
and rally upside is resumed.
This is the stage where market fundamentals are bad but they
are not negative . ( like our GDP 5.4% data which is the 21 month low and also GDP for 3
consecutive Quarters trending lower). The end of wave B is the end of right shoulder. (wave
pattern ABC)
3) Now comes the wave C , prices move faster and moves in waves of 5 to complete the head
and shoulders target. Generally, wave C is at least as large as wave A or 1.618% of wave A. As
we have a head and shoulders target, its coinciding exactly with 123% - 131% of Fibonacci
extension ( profit booking area) and it will also form a new low and test the lows of elections
day ( we have a big wick that is not tested yet.)
This is when everyone starts believing that we entered bear market but that's the place where actual correction is over and bull rally resumes or complex correction starts. ( may be triangles or flats with X waves in middle, we can establish that later).
But as of now i still think the correction is not over and we may see one very good fall.
Disclaimer -
This is just my idea, please double check and plan accordingly.
Happy Trading!!!!!!!!!!
Update 9/12/2024
Markets witnessed nice short covering last 2 weeks. Many people think the correction is over and bull rally resumed. whats actually happening? Sharing my idea.
The actual head and shoulder correction is about to come and the correction is not over yet.
what we have actually seen is wave A of the correction and currently the up move is wave B correction of the corrective wave (ABC) which forms the end of right shoulder. Wave C downside is still pending.
The sequence of events
End of rally happens when valuations are too high and a correction is needed. (26300 levels)
1) Starts to dump which we witnessed in wave A correction of FII selling. ( increased volume in
cash market and rise in implied volatility in options market)
2) Then comes the wave B opposite to wave A where everyone thinks the correction is over
and rally upside is resumed.
This is the stage where market fundamentals are bad but they
are not negative . ( like our GDP 5.4% data which is the 21 month low and also GDP for 3
consecutive Quarters trending lower). The end of wave B is the end of right shoulder. (wave
pattern ABC)
3) Now comes the wave C , prices move faster and moves in waves of 5 to complete the head
and shoulders target. Generally, wave C is at least as large as wave A or 1.618% of wave A. As
we have a head and shoulders target, its coinciding exactly with 123% - 131% of Fibonacci
extension ( profit booking area) and it will also form a new low and test the lows of elections
day ( we have a big wick that is not tested yet.)
This is when everyone starts believing that we entered bear market but that's the place where actual correction is over and bull rally resumes or complex correction starts. ( may be triangles or flats with X waves in middle, we can establish that later).
But as of now i still think the correction is not over and we may see one very good fall.
Disclaimer -
This is just my idea, please double check and plan accordingly.
Happy Trading!!!!!!!!!!
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Disclaimer
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