Mad bull or not, we are projecting higher and that is more important.
Observations In the longer term chart it can be observed that each time we started a fresh wave after making a base, it ended at a precise Quad level. Sharp reactions can be seen near those levels. We can expect similar targets for wave 5. If that is the case, the projected target could be 15397.
Also In the current chart, the 5th wave seems quite clean compared to wave 1 and 2. There was some sort of hesitation and complexity in the wave 1 and 2 price action but clear sub-waves can be observed in wave 5. Its highly likely that we are in sub-wave "iii" of the larger 5th.
Where to expect the pullback The length of wave 1 and 2 were approx. 4000 to 4500. We have already traveled approx. 4200 so far in wave 5 and we are double-up from the base of wave 5. It does not mean that we will reverse from here. But I have been watching 11111 to 11400 zone for a pullback.
The longer term and short term strategies There is a high probability that we burn our fingers shorting in a bull market. The strategy should be to buy the pullbacks. At this point the markets are in highly stretched and overbought situation. In order to invest, its better to wait for a retracement rather than jumping at higher levels and suffer drawdowns. For short term trades, its better to buy the pullbacks on smaller timeframes and take quick gains off the market whenever possible.
Hope this analysis would help some traders in taking better decisions. Do hit like and comment.
I think our market is acting a bit irrational in the name of BULL Run (not that the name already signals it but Well this one is going crazy). Firstly, while Japan and the rest of the major markets (US excluded) have corrected in past week upto 3% we are still overdue. Secondly, Oil if it sticks around at current levels or higher for a longer period, I think all the calculations will go out of the window. Thirdly, while the rest of the world does have something to cheer about, we certainly don't. Anyways, more money is lost timing the markets but well I think booking profits 4-5% on each rally would we wise thing to do.
Anyhow, needless to say, great analysis and thoughts as always :)
Thanks!
Bravetotrade
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@mackanshunegi, Absolutely, for those who are already in the market it's good to book profits in parts as we proceed higher.
Thanks for the global insights.
mklives
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when pharma and IT stocks start taking the market higher,,usually it signals the rally will come to an end in the near future..thats how it has been in this bull market...
11600 to 12000 max... then correction before elections starts..
Einstein15
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Coooll!! What seemed impossible in the july chart back then is real now. After one hits the play button, theres No retracement just a simple leg up to complete the channel as one wud expect on a 15 min timeframe and all..All one had to do was to believe in the technicals and trade the upchannel. If only it was that easy though unless one is a machine .
anyways, withthe addition of the waves in this post, it paints a good picture of future.ALso the double/triple/quad analysis is awesome. Thanks for that.
as stated, 4 to i = i to iii
also ii to i leg is 3 times the ii to iii. idk if it can be of any significance though thats why u must not hv mentioned it :D
Bravetotrade
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@Einstein15, yes, if we hit the play button we are heading up but quite faster. It has breached the channel which is highly bullish as well as over stretched. Seems 1.13 extension will be hit in the 2018Q1 rather than in 2019Q1.
U r right..Psychology is the thin line between believing one self and behaving like a machine :D
Double up is 1:1 as mentioned and that's where we are right now, surely it is an important level.
Thanks for ur comment.
Parasuram
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A big event is scheduled next week.. I st Feb... Normally markets swings between events... we will wait and see.. Besides the all time high PEs for Nifty is 28 and we are there now...But as you say.. Market is yet to give shorting signals.. But i woud if it closes below the previous low or weekly low .. But shorting on market will turn will definitely burn hands , pockets and everything...
Bravetotrade
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@Parasuram, haha..market is full of surprises, it has negated bearish signals at two or three occasions. Patience may help us in the long run for larger gains, short term is good to earn bread and butter.
kacharts
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well said patience can give larger gain and on short term i would say out of million only 1% r able to earn that bread butter rest help those 1% and long term investors by donating /lossing their money
Anyhow, needless to say, great analysis and thoughts as always :)
Thanks!