This post is primarily bearish and gives a possible bullish case well. That does not mean, that I am confused, but rather keeping open all price actions. The NSE 500 is a broader index with 500 shares of traded on index, this can be a good measure of market.
The high made in Index in Jan 2010 did not get voilated, in fact from that point it raced down with market. This i would like to put in as wave 1. The subsequent upmove to Apr 2010 levels was wave 2.
As of now, i believe the broader market has topped out.
The above chart is major bearish, in fact suggesting formation of Primary wave B / wave 2 top, in Jan 2010 at 4500 level. Currently, the index is at 4256, a break below 4000, can take the index to 3500.
In fact under the current bearish preferred wave count, and we having completed wave 2 at 4449 (in blue font), we are in wave 3. The target of this wave would be takin 1.618x of wave 1 be 3621 level on this index. Below 4000, there shall be a cup and handle formation with distance to be covered been 500 points down from 4000, making it target zone of 3500. This is the broader index, and major correction shall creep in stocks.
A close look at the chart, wil give a rather clear picture:
The targets are posted on chart:
A move above 4500 shall be extremely bullish, pushing the index to 5000 levels. There shall be a cup and handle, and the currently labeled wave 2 shall be the lip of cup.
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