Negative divergence on RSI for wave 3 and wave 5 was indicating weakness which is confirmed when wave 2 & 4 trend line got broken in less time than wave 5 took to form.However wave 4 low's has not been taken taken out in less time than wave 5 took to form indicating current fall is correction and not major trend reversal.
Question is what form will this correction take.
1)Zizgag
2)Flat(If flat than which flat)
To simplify this question if prices manages to retrace 61.8% (15747) wave A fall, then we can rule out the possibility of Zigzag,if not than we can rule out the possibility of Flat.Hence key level to watch out for is 15747.If we get one candle closing above 15747 than we weill get confirmation for Flat correction,which will open 3 scenarios
1)Wave B retracing wave A between 100-123%,then following wave C fall will retrace wave B more than 100%,meaning wave A lows of 15537 will be broken.This will then be called irregular flat correction.
2)Wave B retracing wave A between 81-100%,then following wave C fall can retrace wave B by less 100%(incase of C failure),between 100-138%(incase of comman flat),more than 138%(incase of elongated flat)
3)Wave B retracing wave A between 61-80%,then following wave C fall can retrace wave B by less than 100%(incase of double failure),between 100-138%(incase of B-failure),more than 138%(incase of Elongated flat).
For Zigzag scenario,current wave B bounce terminating below 15747, will open 3 scenarios.
1)Wave C retracing 61.8% of wave A from wave B top(incase of truncated Zigzag)
2)Wave C retracing 100% of wave A from wave B top(incase of normal Zigzag)
3)Wave C retracing between 100-161% of wave A from wave B top(incase of elongated Zigzag).
Conclusive comment's:
As of now we are in a correction form of which is unknown,described scenario's will help in identifying correction forms and sub-forms depending upon which action can be taken at appropriate levels.
In either case(Flat or Zigzag),one should remember wave C fall is yet to happen and can commence anytime hence all longs should be liquidated in current bounce at appropriate levels and should wait for right opportunity to re-enter.
PS:If i have missed anything do let me know.
Question is what form will this correction take.
1)Zizgag
2)Flat(If flat than which flat)
To simplify this question if prices manages to retrace 61.8% (15747) wave A fall, then we can rule out the possibility of Zigzag,if not than we can rule out the possibility of Flat.Hence key level to watch out for is 15747.If we get one candle closing above 15747 than we weill get confirmation for Flat correction,which will open 3 scenarios
1)Wave B retracing wave A between 100-123%,then following wave C fall will retrace wave B more than 100%,meaning wave A lows of 15537 will be broken.This will then be called irregular flat correction.
2)Wave B retracing wave A between 81-100%,then following wave C fall can retrace wave B by less 100%(incase of C failure),between 100-138%(incase of comman flat),more than 138%(incase of elongated flat)
3)Wave B retracing wave A between 61-80%,then following wave C fall can retrace wave B by less than 100%(incase of double failure),between 100-138%(incase of B-failure),more than 138%(incase of Elongated flat).
For Zigzag scenario,current wave B bounce terminating below 15747, will open 3 scenarios.
1)Wave C retracing 61.8% of wave A from wave B top(incase of truncated Zigzag)
2)Wave C retracing 100% of wave A from wave B top(incase of normal Zigzag)
3)Wave C retracing between 100-161% of wave A from wave B top(incase of elongated Zigzag).
Conclusive comment's:
As of now we are in a correction form of which is unknown,described scenario's will help in identifying correction forms and sub-forms depending upon which action can be taken at appropriate levels.
In either case(Flat or Zigzag),one should remember wave C fall is yet to happen and can commence anytime hence all longs should be liquidated in current bounce at appropriate levels and should wait for right opportunity to re-enter.
PS:If i have missed anything do let me know.