NIFTY made a dash towards the low of 5032 levels closing below all parameters and presenting a gloomy picture that it would go to 4500 levels immediately :)!! But as usual market is going to surprise with +ve global clues and a Gap up is certain.
How far it would go up?what are the resell levels if any? should we resell or change coats for a BUY?? Charts Speak for itself!!
Day 5-0 Harmonic Pattern:
The Bullish 5-0 starts at the 0 point, representing an extended down leg to begin the pattern at
X. The initial point X acts as the low of this prior substantial decline. After a quick reactive
bounce to the A point, the structure abruptly continues the decline, only to find support slightly
past the prior low at X. This is the failed wave 3 or wave 5 – in Elliot Wave terms – that
establishes the rest of the structure. However, the important limits from the Harmonic Trading
perspective requires that this X, A extension be at least a 1.13 but not greater than a 1.618.
After that impulsive failed wave is established, the BC leg rallies to at least a 1.618 extension
of the AB length but it does not exceed 2.24. Again, this tight range of 1.618-2.24 is a
defining element of the structure. If the 1.618 limit is not reached, the structure is not a valid
5-0.
AS PER THE TEXT ABOVE:
(REFER JUNE 8,13 POSTS FOR PATTERN DETAILS)
Bullish 5-0 pattern:
XA - 4804 - 5020
B - 4770 - 113% retr of XA
C - 5349 - approx 224% retr of AB DONE
D - 5032 - 50% retr of BC - DONE
As per the Pattern Nifty Has completed a 50 % retracement from the High of 5349 which happens to be the 224% retracement of the previous wave 5020 - 4770 - The parameters fits perfectly within the boundary of the 5-0 pattern.
Considering the EW perspective:
Within Elliott Wave terms, the AB leg may be a failed wave
3 of a corrective "abc" or a failed wave 5 of an entire completed trend. Although these
are obvious similarities, from the Harmonic Trading perspective, it is important to
examine the structure via its relative Fibonacci measurements to satisfy the pattern
requirements.
It will take some time to begin to identify this structure but the obvious characteristic is the failed
down wave followed by a precise 1.618-2.24 extension. At that point, it is important to
calculate the 50% retracement level with the Reciprocal AB=CD and study the price action in
the PRZ.
Here considering the AB leg as the 5th wave followed by an extended wave of 224% retracement and now a fall upto 50% retracement calls for an UPTREND.
Retracements to watch for:
38.2% - 5153 - 100 DMA/week 5 EMA/current month 5EMA
44.7% - 5174 - Month 5 EMA
50% - 5191 - Month 5 EMA +20pts
61.8% - 5238 - 20 DMA
If the Months close is above 5175 - then the uptrend would resume.
SYNOPSIS:
BUY ABOVE 5090 - 200 SMA WITH POSITIONAL SL 5040 (PRZ) of the Pattern INTRADAY SL 5080.
WEAKNESS ONLY BELOW THE CURRENT LOW OF 5032 - INTIALTARGET 4991 - 61.8% retr.
| Developing Week Levels | |
| CLOSE | |
| PIVOT | 5080 |
| HI EMA | 5232 |
| LOW EMA | 5106 |
| 5 EMA | 5153 |
| 10 EMA | 5149 |
| PrevHigh | 5164 |
| Prev Low | 5032 |
| CHECK LIST-DAY | | | |
| CLOSE | 5043 | 5 SMA | 5121 |
| PIVOT | 5067 | 5EMA | 5113 |
| HI EMA | 5156 | 10EMA | 5155 |
| LOW EMA | 5094 | 13EMA | 5168 |
| prev HI | 5126 | 20 Hr MA | 5104 |
| prev LOW | 5032 | 50 Hr MA | 5158 |
| 50 DMA | 5102 | 100 Hr MA | 5211 |
| 100 DMA | 5156 | 200 Hr MA | 5201 |
| 200 DMA | 5099 | | |
