After a sustained upmove since 4530 levels , a correction has set in from short term top at 5630 . We try to analyze whether the correction will extend further in short term? and what's in store trading further ? Below are some charts and conclusions -
1. Indicators :
Both the Weekly and Daily TF indicates further downside.
2. Moving Averages :
The 5week ema signals for a weak bias till remains below 5450.
3. F & O Data :
The Futures data indicates of Short build up last week and Option data signals of further slide may be even below 5200 levels.
4. Volumes :
The 10 d volume profile indicates of downside to continue till closes above apprx. 5365 levels as of now.
5. Elliott Wave Analysis :
One of the probable EW counts that looks good in the Larger Time Frame is that we still are in a Bear Market and the upmove since 4530 level was the last leg of an X wave (in Expanded Flat) after the Double Zigzag since 6338 .
The above count is more clear on Weekly charts where noise is less.
The Count since 4532 may be as follows in 5 waves up-
The Count since short term top of 5630 may be as follows-
The Alternate count in larger TF may be the Bear Market ending at 4530 levels and new impulse up which is being corrected now. The Fibo. chart shows probable targets for counts .
1. The Short term looks tilted towards downside positionally with targets of 5150 and 5050 appx.
2. 5365 can be used as SAR for positional trading.
3. The Bias changes on close above 5450 and can be treated as Point of Invalidation of the analysis as of now.
4. The downside may extend further as per probabale EW count in Medium Term ,so be cautious with Buying on Dips.
5. A word of caution on the Golden Cross of 50-200dma making traders overtly bullish . Check the chart below for a whipsaw in 2004. Nothing is cast in stone in these markets.