August 21, 2017

Neowave outlook of market

The larger question is whether Index has completed post-Dec’16 rally as a Triple Diametric. For this to confirm, we require complete retracement of the 3rd Corrective, i.e. break below the low of 30th Jun’17 at 30680 (Nifty 9448).

By NEoWave, the pattern implication for a Triple is about 60-70%. If Sensex retraces post-Dec16 Triple Diametric rally by 60%, it would project a downside of about 28000-29000. So, watch for the said confirmation.

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Index has been hitting a major top every 2 years, from where, it generally loses (a) 12-13% (b) 25-30% (c) 50-60%. Starting from ‘2000, VP’s 2-year Cycle of Tops showed major reversals in ‘2002, ‘2004, ‘2006, ‘2008, ‘2010, ‘2013, ‘2015.

From these major tops, Index lost (a) 12-13% in ‘2013, (b) 25-30% in ‘2002, ‘2004, ‘2006, ‘2010, ‘2013 & ‘2015, and (c) 50-60% in ‘2000 & ‘2008.

From the last major top of ‘2015, Index has now completed 2 years in ‘2017. If the Sensex loses even 12-13% from this year’s high of 30686, it would project downsides closer to 28000-29000 (Nifty 9000).

These levels are similar to what we projected earlier as 60-70% retracement of Triple Diametric rally since Dec’16.

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