December 21, 2016

Neowave analysis of market

Since Thursday’s low was also the low of the week, we may consider the low of 26407 (Nifty 8121) as a crucial level on downside even for the fresh week. Remember, Thursday’s low was hit after a gap-down open post Fed policy, but Index also bounced strongly from the low.


However, we can say for sure that no further upsides can open until Index can crack decisively above the 50%-mark, and no further downside can open until it can decisively break below last week’s low.


Index made several attempts to cross 50% retracement level in the last 3 weeks. If b-leg ends without crossing 61.8% mark, it would mean that the a-leg fall was “impulsive”.

If a-leg was “impulsive” and b-leg corrected less than 61.8% of a-leg, then the larger “e” could be developing as a Zigzag. As per NEoWave rules for the Zigzag, the c-leg of a Zigzag should break below the bottom of a-leg, i.e. Index should hit a new low for the fall.



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