The markets tested new highs at 14753 and then there has been a violent correction of approx 1100 points so far. What does the future hold for the markets. Let us look at the fundamental and technical reasons affecting the markets.
Fundamentals:
1. Vaccine for Covid is here. The cases are going down and the economy is starting to fire. I see construction activity picking up and car sales sustaining. 2 sure shot indicators that the economy is doing well.
2. The US political scene is clear now and stabilized. The uncertainty is out of the way. Democrat control can mean more taxes but that is the only uncertainty.
3. The Indian budget is the immediate uncertainty for the markets. Once that is out of the way things should clear up.
Technicals:
We made a bottom at 7511.
1 count could be:
1. 7511- 9889 (2378 points)
2. 9889 - 8806 (1083 points)
3.1 8806 - 11794
3.2 11794 - 10790
3.3 - 10790 - 12025
3.4 12025 - 11535
3.5 11535 - 14753
Total 3rd wave is 5947 points which 2.26 times wave 1.
4th wave is correcting rise from 10790 to 14753 with targets of 13248, 12772 or 12303.
It could also be that 5 waves are complete at 14753 and we are correcting the whole rise.
My hypothesis is:
Wave 4 should end between 12500-13000 and we should have 1 more up move between 2500-3000 points to around 15-16 k before correcting entire up move.
Alternate theory is going back to 7511 which seems faint for now.
