July 4, 2016

Neowave outlook of market

Structurally, on +ve follow-up to Hammer last week, we did not rule out that Brexit fall may have ended x-wave. We also argued that if that is indeed the case, then “D” is still developing as a Complex Corrective, and 2nd Corrective could reach new highs for “D” leg.

By NEoWave, Complex Corrective involves x-wave which separates 2 standard Correctives. The only minimum requirement is that the 2nd Corrective should cross the end-point of the 1st Corrective.
The labels for x-wave is now finalized at the bottom Brexit fall, and the recovery thereafter is marked as lower-degree “a” leg of the 2nd Corrective. Note that the Brexit fall considered as the lower-degree c of x-wave.
The “a” leg of 2nd closed the Brexit gap and also crossed the top of 1st Corrective, which achieved its minimum requirement discussed above.


However, note that 5 consecutive Bull candles is a record since 23rd Jun’15, and 6 consecutive Bull candles with higher high-low would be a record since 27th Jan’15
If the history is any indication, the action is looking more and more overstretched, and the Index could turn wobbly any time soon.

Read more at http://content.icicidirect.com/ULFiles/UploadFile_201674111936.asp

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