Summary
Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Long Term Revision Point: Break below 2252
Potential Longer Term Targets: 6357 and above
Highs/Lows: Last 30 days: 5310.85/4692.35, Last 6 Months: 5310.85/3918.75, Last 12 Months: 5310.85/2539.45
The market continued with an upward move for three more days till it made a high of 4929.70 on February 17, 10. The move since February 8, 10 low (4675.40) to the February 17, 10 high (4929.70) seems to be a three wave move (in a double zigzag), which has either completed wave 2.C or has completed the first leg of the fourth wave, i.e., wave a.2.C. This creates the two alternative scenarios that we shall be presenting in this weeks report.
As per the first scenario, with only one leg of the fourth wave completing at the February 17, 10 high (4929.70), we have wave a.2.C at the February 17, 10 high. The two important factors in favor of this scenario relate both to the depth as well as the breadth of the corrective move so far. Firstly, it seems very unlikely that a second wave would end at correcting the first wave by a retracement of merely 38%. Second waves are generally deeper than 38%. Furthermore, it also seems unlikely that an impulse move lasting 22 days (from January 6, 10 to February 8, 10) will be corrected only in 7 days. Thus, with a possible wave a.2.C, in three waves, at the February 17, 10 high, we can either expect a flat correction or a triangle at this time. However, being a second wave correction, where a triangle generally does not appear, we are inclined towards expecting a flat correction in the making. The b waves of a Flat correction generally retrace around 90% to 138% of the a waves. Thus, our first target for the b wave of the current correction is around the 4700 level. If the index falls below the February 8, 10 low, we may see it fall further to around the 4600 level. If our assessment is correct, the end of the b wave will see a five wave rise taking the index above the February 17, 10 highs (4929.70).
Our alternative scenario considers the February 17, 10 high as a completed wave 2.C. As per this scenario, a five wave sell-off should be witnessed in the coming days.
In either of the aforementioned two scenarios, we expect to see a fall close to or below the low of February 8, 10.
Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Long Term Revision Point: Break below 2252
Potential Longer Term Targets: 6357 and above
Highs/Lows: Last 30 days: 5310.85/4692.35, Last 6 Months: 5310.85/3918.75, Last 12 Months: 5310.85/2539.45
The market continued with an upward move for three more days till it made a high of 4929.70 on February 17, 10. The move since February 8, 10 low (4675.40) to the February 17, 10 high (4929.70) seems to be a three wave move (in a double zigzag), which has either completed wave 2.C or has completed the first leg of the fourth wave, i.e., wave a.2.C. This creates the two alternative scenarios that we shall be presenting in this weeks report.
As per the first scenario, with only one leg of the fourth wave completing at the February 17, 10 high (4929.70), we have wave a.2.C at the February 17, 10 high. The two important factors in favor of this scenario relate both to the depth as well as the breadth of the corrective move so far. Firstly, it seems very unlikely that a second wave would end at correcting the first wave by a retracement of merely 38%. Second waves are generally deeper than 38%. Furthermore, it also seems unlikely that an impulse move lasting 22 days (from January 6, 10 to February 8, 10) will be corrected only in 7 days. Thus, with a possible wave a.2.C, in three waves, at the February 17, 10 high, we can either expect a flat correction or a triangle at this time. However, being a second wave correction, where a triangle generally does not appear, we are inclined towards expecting a flat correction in the making. The b waves of a Flat correction generally retrace around 90% to 138% of the a waves. Thus, our first target for the b wave of the current correction is around the 4700 level. If the index falls below the February 8, 10 low, we may see it fall further to around the 4600 level. If our assessment is correct, the end of the b wave will see a five wave rise taking the index above the February 17, 10 highs (4929.70).
Our alternative scenario considers the February 17, 10 high as a completed wave 2.C. As per this scenario, a five wave sell-off should be witnessed in the coming days.
In either of the aforementioned two scenarios, we expect to see a fall close to or below the low of February 8, 10.
