June 13, 2016

Neowave analysis of market

The Black channel encloses the choppy movements from 31st May low of 26561 (Nifty 8134) onwards. Break below 31st May low within the next 4 days would mean faster retracement of the last rising segment.

By NEoWave, faster retracement of last rallying segment is a confirmation that g-leg or 1st part of g-leg is over.

However, to confirm that the bigger “D” leg is also over, we require full and faster retracement of g-leg itself.

If the correction stretches much beyond 5 days, it would suggest a larger correction, the next crucial level for which would be the 0-f line (not shown on the charts). 

The 0-f line may be considered the Base-line for the post-Budget rally or “D” leg. The value of this line in the 3 days would be around 23900 (Nifty 7960).

Faster break, in lesser time than the time consumed by the g-leg, of this Base-line, followed by faster retracement of the g-leg itself would mean “D” of the Expanding Triangle (ET) is over, and “E” of ET is going down.

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