UPDATE : 19-10-2014 :
1. Complex corrective from top of 8180 is on.
2. This may be IV-3 or may be larger 4th wave correction. (as in charts above)
3. 50dma was broken convincingly and now last 2 sessions 100dma is supporting . (The trading range mentioned in hrly chart got broken bringing in short term weakness).
4. Correction unfolding is a combination corrective most likely a-b-c-x-a-b-c (Flat-x-may be zz) as of now .
5. Now close above 50dma may signal a likely end of correction and above 20dma as confirmation of it.
Similarly break of 100dma may extend the correction further to 7650-7590 zone.
October 20, 2014 at 12:29 AM
1. As mentioned above and in probable count last post, we did IV-3 at 7723 low ( flat-x-zz), moving up above 50-20dma we got confirmation of end of correction and a firm move above last high of 8180 justifies V-3
2. Now this fast upmove from 7723 can be taken as V-3 and may find positional target in 8425-8550 zone. Right now we may be in the iiird of this V-3.
3. Next week is a truncated week with two trading holidays. We may trade range bound with upward bias and may trade in the 8250-8450 broader range.
Below is the updated chart with EW counts further from the last update.
Theoretical Target for Wave V-3
After identification of the wave 4th a new channel can be drawn with Trendline connecting wave 2 and 4 and other running parallel starting from end of wave 3 .The wave 5 may end near the channel top or within it depending on its extension.
The Price projection for a wave 5 may be 38.2 % (min) above the net length of wave 1 to 3.
Most common method of Price projection suggests that the wave 1 and 5 are related with equality (or 1.618, 2.618 fibonacci ratios).
The above mentioned methods are marked in the chart :
Above is just a theoretical exercise to find out a probable target zone for wave V-3 which comes in the range of 8550 + as of now, but the 5th waves have notorious characteristic of ending suddenly or getting extended. So watch for exhaustion signals first near 8450(+-25) and then in the apprx target area as in the chart. Will update further for any change in view.