What a week! Market stayed steady for almost the entire week and then had a sharp correction during the ending hours of Friday. Our position, however, is still intact.
Long Term: In the long term, it is becoming a little worrying that for two consecutive weeks, the market has failed to breach the 78.6% correction from the March decline. It is a wait and watch now.
Medium Term: In the medium term, the projection continues to hold. We are in the third wave, which seems to be extended and should take us to 11,800-12,000 levels.
Short Term: In the short term, the first wave seems to be over. The ensuing correction was what we saw during the ending hours of Friday. So the wave 1 is over. We are at the Wave 2 correction. Once it is over, wave 3 should begin. To be honest, I am a little confused in the shape of the Wave 2 correction. Is it a complex correction of a flat and then a zig zag? Or is it a simple correction of a zig-zag. Time will tell. In my opinion, the market should open gap-up on Monday. In the ensuing down movement for gap closure, if the market breaks the Friday low significantly, then we have complex correction. That would take the market further down before starting to rise again. If it is a simple correction, then the next target is up to around 11,600 levels.
How will I trade this? We will hold to our positions. I will stay with that. For the adventurous, I recommend doubling down on the existing long position when the market closes its gap opening on Monday. Let me again remind you of the positions we have taken. Our positions are: Long Entry at around 11,216.9. Profit Exit target is 11,600. Stop loss is 10,880.
Long Term: In the long term, it is becoming a little worrying that for two consecutive weeks, the market has failed to breach the 78.6% correction from the March decline. It is a wait and watch now.
Medium Term: In the medium term, the projection continues to hold. We are in the third wave, which seems to be extended and should take us to 11,800-12,000 levels.
Short Term: In the short term, the first wave seems to be over. The ensuing correction was what we saw during the ending hours of Friday. So the wave 1 is over. We are at the Wave 2 correction. Once it is over, wave 3 should begin. To be honest, I am a little confused in the shape of the Wave 2 correction. Is it a complex correction of a flat and then a zig zag? Or is it a simple correction of a zig-zag. Time will tell. In my opinion, the market should open gap-up on Monday. In the ensuing down movement for gap closure, if the market breaks the Friday low significantly, then we have complex correction. That would take the market further down before starting to rise again. If it is a simple correction, then the next target is up to around 11,600 levels.
How will I trade this? We will hold to our positions. I will stay with that. For the adventurous, I recommend doubling down on the existing long position when the market closes its gap opening on Monday. Let me again remind you of the positions we have taken. Our positions are: Long Entry at around 11,216.9. Profit Exit target is 11,600. Stop loss is 10,880.
Trade closed: target reached:
Profit Target Reached.