Since the 2570 rally & after reaching 3076 yesterday, Nifty broke the 2 day low confirming a correction..The lower range of this correction is 2922 and the higher level may be 3076 or higher around 3100.
There are negative divergences in the short term charts but shortcovering keeps the Nifty firm..
Trade the channel..Book profits near the channel tops and reenter near the channel bottom with appropriate SL.
There are many wave possibilities..but the prices are trending up..Follow that.If we get some clarity on the EW, we will post it.
Stock buying in rotation goes on..ITC & NTPC which were quiet for a while broke out of their range today.
For the settlement, buy into those stocks which are trading near their Dec. month's high on dips..
If the EW labelling of Hourly chart turns out to be correct, more upsides possible.(SL 2922)
3 comments:
hi...are there any technicals to watch out for the false breakdown...i am a beginner in TA and trying to use the intraday charting for trade...but have suffered from these false breakdowns on few occasions..
like for example here where u have pointed out the false indication the RSI is reasonably high and red line is above blue ...so a novice like me will think its a sell signal but turns false !!!
The breakdown happening when the rsi is near the low, especially when the market is in good uptrend must be given a chance for a reversal.
And it did happen...the next candle, a bullish engulfing after a steep fall from 3076 to 2922 is worth going long...see the minor +ve div in 5.min chart also.
In EW, the channel break and reentering the channel generally indicate an oncoming correction..Again we have to remember the time cycles..see something in 5.min..do for a very short term, see in hourly, act for some hours only unless it spills over to the daily time frame.. Again no absolutes here. Each situation is unique..go by the weight of the evidences at each situation remembering all time cycles are at work in the market.(For eg: weekly was dn two weeks ago but turned up last week and that leads to more strength, etc.,etc.,etc..)
Best of luck..
Thanks for the information.I will keep an eye on the other indicators next time an see how it goes.
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