- October 30, 2011
- Posted by: Ramki Ramakrishnan
- Category: India
No matter how good your analysis your fate depends on your data! Occasionally, you might think your data is wrong, when it is indeed correct, and suffer a fate that is just as bad. I think (still not sure) I am in the latter camp as far as NSEI is concerned. As I often remind readers, WaveTimes is a place you come to learn, and verify your own ideas. I am not offering trading recommendations per se, but often present trading ideas. There is a subtle difference.
Take a look at the two charts here, and compare it with my recent update on the NSEI and you will see what is going on. Now the key question for some of you is are we finished with the correction and have we embarked on a new uptrend? Unfortunately, in the current position this question cannot be answered truthfully. However, I would continue to think that in the medium term, we will probably need to come down again. This is for two reasons. First, the double zigzag only corrected the prior impulse wave by about 38%. If we are going to embark on a new third wave after a shallow correction such as this, then that third wave will probably be an extension. Given the current economic and political situation in both India and the world in general, we should be very careful of anticipating a third wave at this juncture. Ralph Elliott has always recommended traders to be mindful of the broader fundamentals. With these reservations in mind, we should keep a watchful eye on 5160 because not only is it the top of wave 1 of the latest rally, but it is also the top of the first rally from the lows seen earlier in the year. Having said that, should the current third wave exceed 5450, and travel higher, the next resistance comes only around 5600.