June 5, 2017

Neowave outlook of market

Thus, none of the Upward segment was “extended”. As per NEoWave, an “extended” segment should be 161.8% of the next largest segment. Therefore, the post-Dec’16 development does not attract any “impulsive” interpretation.

We, accordingly, provided a “Corrective” interpretation to the rally in the form of Diametric in the 1st Corrective, Flat in “x”, followed by another Diametric pattern in the 2nd Corrective.

At the same time, we also observed that each successive Upward segment hit a “higher” top. Similarly, each Downward segment ended at a “higher” bottom.

This, to us, was a sign of continued upward development. As we explained, “higher top higher bottom” defines an UP-trend as per Dow Theory, the most time-tested technical parameter to identify an UP trend.

We, therefore, argued that as long as the Index keeps making higher top as well as higher bottom, all dips would only provide buying opportunities.

We also argued that for suspecting any maturity of the post-Dec’16 rally, firstly we require faster retracement of the rallying segment, and secondly, this should be followed by “lower top lower bottom” formation.

Read more at http://content.icicidirect.com/ULFiles/UploadFile_20176510244.asp

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