January 2, 2017

Neowave outlook of market

Till Friday’s high, last week’s 4-day rally had retraced about 88% (Nifty 79%) of preceding 11-day. Structurally, the question for the fresh week is whether the rally would be able to retrace the fall in faster time, for which, 7 days left now.

If the rally does retrace the preceding fall in faster time, i.e. moves above starting point of the fall at 26804 (Nifty 8275), then it would be the first time since Sep’16 that any such fall would be getting completely retraced.

Remember, last week we said that the development from Sep’16 could be more appropriately explained as a Diamond-Shaped Diametric, which is 7-legged pattern. Its all internal 7 legs, i.e. a-b-c-d-e-f-g, are now shown on the initial Daily chart.

As per this structure, the preceding 11-day fall from 26804 (Nifty 8275) to last week’s low is labeled as “g” or last leg of the Diametric.

By NEoWave, faster retracement of last leg of a structure suggests that the structure, (or downward Diametric in our current case), may be over, and another structure in an opposite directions has opened.

Therefore, whether the Index can move above 26804 (Nifty 8275) would be the most crucial technical event to watch as we begin trading in the fresh year ‘2017.


Read more at http://content.icicidirect.com/ULFiles/UploadFile_20171211252.asp

No comments:

Post a Comment