NIFTY FIFTY
- Thread starter AMITBE
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Hi Amitji,
It Needs to maintain 2875 in the coming two days.Then ......
One more thing,Since I follow Elliot,two alternatives prop up for me,
1)We actually started this correction at 3555 on 7th April,the A wave took to 3290 and B got a 161.8% retracement to 3774(3 wave affair).This C became the last leg.So we may have already bottomed out.The F2 data from Pankaj's thread lends credence too.They were exiting from april.
2)We may have completed one leg of the correction at 2595 and we are in for a B wave whose minimum target is 3050 now 38.2% retracement.
Pls treat this as a request to add on more to my observations.
It Needs to maintain 2875 in the coming two days.Then ......
One more thing,Since I follow Elliot,two alternatives prop up for me,
1)We actually started this correction at 3555 on 7th April,the A wave took to 3290 and B got a 161.8% retracement to 3774(3 wave affair).This C became the last leg.So we may have already bottomed out.The F2 data from Pankaj's thread lends credence too.They were exiting from april.
2)We may have completed one leg of the correction at 2595 and we are in for a B wave whose minimum target is 3050 now 38.2% retracement.
Pls treat this as a request to add on more to my observations.
Looks too good to be true, doesnt it.
And the gap-up coming up shortly is the last thing chartists want to see, especially when they are looking for signs of a range bound consolidation, knowing well that that is the only price action to trust in these times.
That kind of consolidation is akin to healing of wounds where the pertinent issue is how high can the wounded jump.
Jump not once or twice, but keep up the jump-pressure.
Thats exactly what a bull market looks like.
So, in other words, all this jumping around doesnt quite fit the bill in an intermediate bear market does it.
We have to see a stop on these gaps in both directions to be able to enter a transitory phase which would eventually lead the markets out of the woods.
But then, the market has its own mind/wisdom, or the lack of it.
It is its own historian.
Every passing day is merely a humdrum, routine page from that history book.
Im not going to attempt any levels today except to point out some important landmarks:
The Nifty at 2923 is holding just below the 200 DMA mark which is at 2926.
The 200 EMA mark is at 2938.
The 20 EMA mark is at 2956.
Then from my data and turning points, 2936 is one.
Then above 2962, the road leads to 2980.
Then above 3004, the levels to look for are 3025 and 3032.
These are all possibilities and levels to watch, and will be posting later again after watching the show for a while.
And the gap-up coming up shortly is the last thing chartists want to see, especially when they are looking for signs of a range bound consolidation, knowing well that that is the only price action to trust in these times.
That kind of consolidation is akin to healing of wounds where the pertinent issue is how high can the wounded jump.
Jump not once or twice, but keep up the jump-pressure.
Thats exactly what a bull market looks like.
So, in other words, all this jumping around doesnt quite fit the bill in an intermediate bear market does it.
We have to see a stop on these gaps in both directions to be able to enter a transitory phase which would eventually lead the markets out of the woods.
But then, the market has its own mind/wisdom, or the lack of it.
It is its own historian.
Every passing day is merely a humdrum, routine page from that history book.
Im not going to attempt any levels today except to point out some important landmarks:
The Nifty at 2923 is holding just below the 200 DMA mark which is at 2926.
The 200 EMA mark is at 2938.
The 20 EMA mark is at 2956.
Then from my data and turning points, 2936 is one.
Then above 2962, the road leads to 2980.
Then above 3004, the levels to look for are 3025 and 3032.
These are all possibilities and levels to watch, and will be posting later again after watching the show for a while.
Retracement levels can be calculated using closing highs and closing lows or intra-day highs and intra-day lows. The retracement level should be calculated from a significant high to a significant low.
A retracement is a countertrend move. Retracements are based on the thought that prices will reverse or "retrace" a portion of the previous movement before resuming their underlying trend in the original direction.
There are many different ways of establishing possible retracement levels when it is clear a countertrend move has started. The trader can look at previous levels of support or resistance, current moving averages or calculate percentage retracement amounts. All of these tools establish possible targets that may be reached during the countertrend movement. The levels they identify can then serve as a guide to observe the market in real time as it tests these zones.
Percentage retracement thinking comes from three main sources: Dow, Gann and Elliott Wave theory. Each theory proposes amounts that a countertrend movement will retrace. Each school holds that if the countertrend movement is able to overcome one level of percentage retracement resistance, it is likely to test the next higher level.
Dow Theory thinks of retracements as regaining between 1/3 and 2/3 of the original Primary move. It emphasizes that retracement targets should be thought of broadly. There is no magic number a stock or index market will retrace. The correction to the main trend will be somewhere between 1/3 and 2/3 of the previous move in the Primary direction. The 50% level is specified as an important level to watch in part because it is midway between the 1/3 and 2/3 amounts.
Elliott Wave theory bases its retrenchment targets on numbers in the Fibonnaci sequence first articulated by Leonard of Pisa, a twelfth century Italian mathematician. The Fibonnaci numbers are derived by adding the sum of the previous two numbers. The first several numbers of the sequence are: 1,1,2,3,5,8,13,21,34,55,89,144.
If, for example, you wanted to find the next number in the sequence you would add 89 + 144 = 233. The ratio of any two sequential numbers in the sequence beginning with 34 is .618. (For example 34/55 = .618.) Elliott in his writing observed that this ratio was the basis of the construction of the Great Pyramid and could be observed in nature, such as in the arrangement of sunflowers. Since human activity was determined by the laws of nature, stock market retracements would often be 0.618 or 0.382 (the reciprocal) of the previous move. Note that the Fibonacci sequence also allows for a 50% retracement, which is one divided by two.
In his writings William Gann placed great emphasis on the division of prices in thirds and eights. The division into thirds is parallel to Dow Theory. Retracements broken down into eights identifies the following percentage amounts as potentially significant: 12.5, 25, 37.5, 50, 62.5, 67, 75, 87.5 and 100%.
Putting the three theories together, traders might look for retracements to achieve the following percentage levels: 12.5, 25, 33.3, 37.5, 38.2, 50, 61.8, 62.5, 66.7, 75, 87.5 and 100%.
A retracement level is more of a science than an art. In addition to pre-set amounts, the trader should examine former support and resistance levels as well as the current position of moving averages. The best approach is to integrate all three tools and establish a zone where a retracement might end.
A retracement is a countertrend move. Retracements are based on the thought that prices will reverse or "retrace" a portion of the previous movement before resuming their underlying trend in the original direction.
There are many different ways of establishing possible retracement levels when it is clear a countertrend move has started. The trader can look at previous levels of support or resistance, current moving averages or calculate percentage retracement amounts. All of these tools establish possible targets that may be reached during the countertrend movement. The levels they identify can then serve as a guide to observe the market in real time as it tests these zones.
Percentage retracement thinking comes from three main sources: Dow, Gann and Elliott Wave theory. Each theory proposes amounts that a countertrend movement will retrace. Each school holds that if the countertrend movement is able to overcome one level of percentage retracement resistance, it is likely to test the next higher level.
Dow Theory thinks of retracements as regaining between 1/3 and 2/3 of the original Primary move. It emphasizes that retracement targets should be thought of broadly. There is no magic number a stock or index market will retrace. The correction to the main trend will be somewhere between 1/3 and 2/3 of the previous move in the Primary direction. The 50% level is specified as an important level to watch in part because it is midway between the 1/3 and 2/3 amounts.
Elliott Wave theory bases its retrenchment targets on numbers in the Fibonnaci sequence first articulated by Leonard of Pisa, a twelfth century Italian mathematician. The Fibonnaci numbers are derived by adding the sum of the previous two numbers. The first several numbers of the sequence are: 1,1,2,3,5,8,13,21,34,55,89,144.
If, for example, you wanted to find the next number in the sequence you would add 89 + 144 = 233. The ratio of any two sequential numbers in the sequence beginning with 34 is .618. (For example 34/55 = .618.) Elliott in his writing observed that this ratio was the basis of the construction of the Great Pyramid and could be observed in nature, such as in the arrangement of sunflowers. Since human activity was determined by the laws of nature, stock market retracements would often be 0.618 or 0.382 (the reciprocal) of the previous move. Note that the Fibonacci sequence also allows for a 50% retracement, which is one divided by two.
In his writings William Gann placed great emphasis on the division of prices in thirds and eights. The division into thirds is parallel to Dow Theory. Retracements broken down into eights identifies the following percentage amounts as potentially significant: 12.5, 25, 37.5, 50, 62.5, 67, 75, 87.5 and 100%.
Putting the three theories together, traders might look for retracements to achieve the following percentage levels: 12.5, 25, 33.3, 37.5, 38.2, 50, 61.8, 62.5, 66.7, 75, 87.5 and 100%.
A retracement level is more of a science than an art. In addition to pre-set amounts, the trader should examine former support and resistance levels as well as the current position of moving averages. The best approach is to integrate all three tools and establish a zone where a retracement might end.
Hi ragh_ash...
The scales may still be tilted in favour of RED LIGHT!
As pointed out by Traderji a few posts above, the Nifty is in the vicinity of a 38.2% retracement area which falls around 3020-3030.
This would be one of the strong reaction points from Fibonacci readings.
I had expected it to test these levels today, and it all but did, but not quite.
Now, a reaction need not necessarily be a reversal, meaning should the Nifty react at these levels, one cannot assume that the south bound journey is on course: It would of course seek support at major Fibonacci levels/supports/moving averages etc. lower down, and as Traderji explained, make an attempt at 3010 plus levels again.
However, there is no assurance those supports/MAs etc would hold true.
On the other hand, should the Nifty continue past 3030 area, it would be heading for a meeting with the 50% retracement area at around 3160-3170.
That would be an acid test, which if it passes, would tilt the scales more towards your Green Light.
The current rally that began with midcaps and spread to the biggies, does give hope, and for this reason I had pointed out here a couple of days ago that the fresh investment is quite likely to be protected from retesting the recent lows by the new owners. One can be very sure that a very high percentage of the new owners is smart money. Smart money will protect its positions.
The down scenario is well drummed into our heads by the media and a few members here as well.
But then, should a couple of more global cues come out suggesting comfort at current levels, buying frenzy may return, typically known as the dog eat dog script, then all the chaps like Namura won't stand around waiting for valuations to emerge again. You can be sure they'll be cornering quality stocks drooling and snarling at one another.
So...this is no time to make assumptions in any direction.
We are far from being out of the woods yet.
The scales may still be tilted in favour of RED LIGHT!
As pointed out by Traderji a few posts above, the Nifty is in the vicinity of a 38.2% retracement area which falls around 3020-3030.
This would be one of the strong reaction points from Fibonacci readings.
I had expected it to test these levels today, and it all but did, but not quite.
Now, a reaction need not necessarily be a reversal, meaning should the Nifty react at these levels, one cannot assume that the south bound journey is on course: It would of course seek support at major Fibonacci levels/supports/moving averages etc. lower down, and as Traderji explained, make an attempt at 3010 plus levels again.
However, there is no assurance those supports/MAs etc would hold true.
On the other hand, should the Nifty continue past 3030 area, it would be heading for a meeting with the 50% retracement area at around 3160-3170.
That would be an acid test, which if it passes, would tilt the scales more towards your Green Light.
The current rally that began with midcaps and spread to the biggies, does give hope, and for this reason I had pointed out here a couple of days ago that the fresh investment is quite likely to be protected from retesting the recent lows by the new owners. One can be very sure that a very high percentage of the new owners is smart money. Smart money will protect its positions.
The down scenario is well drummed into our heads by the media and a few members here as well.
But then, should a couple of more global cues come out suggesting comfort at current levels, buying frenzy may return, typically known as the dog eat dog script, then all the chaps like Namura won't stand around waiting for valuations to emerge again. You can be sure they'll be cornering quality stocks drooling and snarling at one another.
So...this is no time to make assumptions in any direction.
We are far from being out of the woods yet.
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