Post the morning star pattern, nifty gains another 2%...
Now the overall trend is mixed. The reason is the correction from 6300 to 6000 was bigger/ larger than the previous rally... this act itself signifies a trend change.
By above logic, any rally from here on must necessarily be smaller than the previous rally or must not cross 6300. This also means the rally should get terminated soon.
How will we know the correct scenario? let markets tell us. If the markets are to make a new high, we will have a formation of a lower swing high followed by a breakout of this. If markets are to correct, then they will form a lower swing high and eventually break 6000.
Now the overall trend is mixed. The reason is the correction from 6300 to 6000 was bigger/ larger than the previous rally... this act itself signifies a trend change.
By above logic, any rally from here on must necessarily be smaller than the previous rally or must not cross 6300. This also means the rally should get terminated soon.
How will we know the correct scenario? let markets tell us. If the markets are to make a new high, we will have a formation of a lower swing high followed by a breakout of this. If markets are to correct, then they will form a lower swing high and eventually break 6000.
we will have a formation of a lower swing high followed by a breakout of this. Sir kindly update on this as its not clear to me thnx
ReplyDeleteRefer following link for an explanation of swing highs and lows
Deletehttp://www.vfmdirect.in/2013/08/how-to-identify-trend.html
sir thnx
ReplyDelete