1. Please go through the basic EW insight that I have been following - Reference EW Post.
We are currently in the larger 'c' wave down of the 4th wave on the long term charts.
2. This 'c' wave will unfold in three waves down. Currently we may be in the 'B' wave up after completing the 'A' down at 5177 level.
3.This 'B' wave is unfolding in a complex three wave structure ( There is an alternation within a complex correction )
4. We are in the 'b' wave of the 'C' of this larger 'B' wave.
5. This 'b' wave is also trading in a three wave structure and we are in the last leg down which may terminate near apprx. 5720 level or below (if a=c)
6. The Option Analysis shows a support at 5700 and Resistance at 6000 levels .
7. The Trendline joining 6338-6182 has proved to be a Resistance till now after the recent breakout above 5600 level.
So the observations derived from above and a likely Trading Strategy can be -
1. The short term bias is down.
2. The likely targets down are apprx. 5720 and 5625-50 levels . One may book out shorts here.
3. Positional Longs only above recent Pivot High of apprx. 5945 level with immediate target of 6100. (One may enter longs with s/l on trendline break and then position size above the 5945 level)
4. Making it simple , one may keep 5830 level as SAR for short term and manage with booking out at important levels.
5. An important Moving Average of 200dma is nearing the short term target area. This level will play important role in resolving the short term trading . Any break below it will signal weakness , but holding above it will give another try of recent high and further.
If breaks and holds ,one may keep 200dma level as SAR on closing basis for further trading. Also be prepared for a whipsaw or two at this level.
6. 5600 will be a game changer level .The 'B' Wave count will end below it and will bring alternate count into play where the larger 'B' wave ends at last pivot high and 'C' down begins with a target of apprx. 4800 . One may again be short below 5600 level with appropriate S/L.