WHERE IS THE NECKLINE?
The Head and Shoulder and its neckline has been in discussion the last few days. But the pattern at the heart of the debate is the intermediate multi month formation SENSEX is churning since MAY. In our concentration on short term price action, we seem to have forgotten that there is a larger time above the smaller time. The primary pattern of SENSEX supports a similar fractal like the one in debate.
We are not saying don’t watch the pattern. We are just saying that don’t forget the larger time frame. The world watches the Head and Shoulder pattern. We explained why in THE TIME SHOULDER (WAVES.GLOBAL). But is the pattern so important that we focus more on necklines and forget all trendlines. The NIFTY intermediate MAR trendline remains broken and a potent resistance.
What about patterns on momentum indicators. Many experts like Martin Pring have written books about reading patterns like Head and Shoulder in momentum. Why do we forget the patterns in momentum? BSEMETALS intermediate momentum supports many such patterns (SLIDE4). If there is something we love, we love the Head and Shoulder pattern neckline on NIFTY. Ok! It broke! But what about the BSEOIL, BSEREAL, BSEPOWER where it did not. Do the other sectors matter? Or they don’t?
Though markets are flip flopping around previous resistances and we got the leg down right and not the leg back up, we are not excited about the move up. Performance cycles remain negative, intermediate momentum and confluence continues to suggests caution. We are only trading this leg up. The Intermediate view remains ‘UP BUT TOPPING’ for us. About ELLIOTT, if you can spot an unambiguous 2 wave retracement in the leg up for MAR to us, you should be the one answering “WHERE IS THE NECKLINE?”
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WAVES.IND is a perspective product published on Tuesday and Thursday. The report highlights Indian Stock Market top sectoral Indices and Sensex (BSE 30) viz. BSEOIL, BSESC (Small Cap), BSEMC (Mid Cap), BSEHC (BSE Health Care), BSEPHARMA (Pharmaceuticals), BSECG (Capital Goods), BSEBANK (Banking), CNXIT (Technology), BSEFMCG (FMCG), BSEAUTO (Auto) etc.. The product also covers all the 30 Sensex components. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.
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