Tuesday, August 12, 2014
Whenever prices move far away from "averages", there is a tendency to "catch up" by either a sharp bounce or a shallow-time consuming correction.
The corrective fall from 7841 to 7540 shows a distinct 3-wave fall.
The fall from 7752 to 7540 could be labelled with 5 sub-waves.
We, hence, look for a retrace upto 7664-75, above which market could rally anywhere, provided it breaks past the resisting trendline. (there is another minor resisting trendline that connects 7752 & 7709 at 7657)
The reliable 9-Day rsi is attempting a reversal from its critical support which would depend on prices holding above 7594 in the coming days.
Strength is returning with prices closing above 50 dsma @ 7617 and would continue staying above 7599, 2-Hour Low.