No Clarity yet in the markets

Last week, we had considered 2 possibilities in the market. Both still remain alive.

1. The down move is still not complete and a low is pending at 10000-10100 followed by 500-600 point rally.

2. A wave is complete, followed by a rally to 10700-10900 and then a final leg down to C.

Breach of 10398 means down move is not complete and breach of 10640 means we are headed to 10800-10900.

Investors can buy at 10100, sell at 10800

Longer term correction sets in

The markets lost over 300 points on closing basis to close at 10454. There are several assumptions which may need to change following last week massive fall.

1. It was assumed that this is a sub wave 4 fall and a last wave up was pending. Now this probability has the least likelihood.

2. Most likely, the entire up move from December 16 to Jan 18 is being corrected.

3. 2 possibilities, the first down move ended at 10276, we are heading to 10725 to 10829 region before the next down move commences.

4. The first down move is not yet over and we head lower to 10000-10100 range.

The wave 3 from 11117 to 10276 was extended, about 841 points so wave 5 can be a smaller wave, till 10118 followed by a 600 point counter rally.

Either ways in the near term we are headed up.

For traders, 10000-10100 is buying zone and 10700-10800 selling zone.

For investors, 10100 is a 1 buying zone and 9500-9700 second buying zone.

Technical Analysis for week 5th Feb 2018

The markets closed at 10760 down from a 52 week high of 11172. Let us look at the technical analysis.

1. Wave 1 from 9687 to 10490 a gain of  803 points.

2. Wave 2 corrected to 10033, a loss of 457 points or a correction of 57 pc.

3. Wave 3 started from 10033 to 11172, a gain of 1139 points.

4. Wave 4 started from 11172.

A is 11172 - 10878 equal to 294 points

B is 10878 - 11117 equal to 239 points

C is 11117 to 10736 ongoing so far 381 points.

If C is 1.618 times A target is 10641.

Now 2 probabilities from here, 5 the wave starts for at least 800 points from here or it is abc x abc correction.

Targets of x can be  200 to 350 points.

So, if 1 more abc down then that will start from 10900- 11000 to 10500.