#Nifty directions and levels for the 2nd week of October.
Good evening, friends! 🌞 Here are the market directions and levels for the 2nd week of October.
Global Outlook:
In the previous week, the global market closed where it started, indicating that the past two weeks have seen global markets in a range-bound market. Structurally, this is a moderately bullish trend, so we can expect the continuation of this range during the week. Once the range breaks, the trend is likely to continue. In the meantime, there are some important economic data releases this week, including FOMC minutes, Balance of Trade, Inflation Rate, Initial Jobless Claims, and PPI, so we should watch these closely.
Our Market:
Last week, both Nifty and Bank Nifty fell drastically due to F&O-related factors. Structurally, this indicates a clear bearish trend, but the RSI is suggesting a slight bounce back due to the occurrence of divergence. If this happens, we can expect a minimum of a 38% bounce back in the minor swing. We can discuss this in more detail in the charts. Additionally, we have a major event this week: the RBI Policy announcement.
Current View:
The current view based on the RSI data is as follows:
* The RSI divergence is likely to occur in the sub-wave 5. The structure suggests there is a 5th sub-wave forming. Once the market starts to bounce back, we can close the 5-wave structure in the 1st leg of the correction, leading into the 2nd leg.
* The ideal 2nd leg is a three-wave structure, which could take a minimum of 38% to 61% bounce back from the previous swing.
> In rare occasions, it could reach 78%. Structurally, it won’t go beyond this level; however, if it does, the overall trend will turn bullish.
* Once the three-wave structure (2nd leg) completes, the 3rd wave will begin. The 3rd wave is a correctional wave; if it rejects and cuts below the EMA20 line, we can assume that the downtrend may continue further. This is our first variation.
Alternate View:
* The alternate view suggests that if the week starts with a negative candle, it may evolve into a diagonal structure.
* A diagonal is a time adjustment pattern, so the correction could continue with some minor bounce backs.
* However, the diagonal also indicates a sub-wave of the 5th. Once the diagonal pattern breaks upwards, the previous sentiment will apply here as well, meaning we can expect a minimum of a 38% bounce back from the previous swing.
Global Outlook:
In the previous week, the global market closed where it started, indicating that the past two weeks have seen global markets in a range-bound market. Structurally, this is a moderately bullish trend, so we can expect the continuation of this range during the week. Once the range breaks, the trend is likely to continue. In the meantime, there are some important economic data releases this week, including FOMC minutes, Balance of Trade, Inflation Rate, Initial Jobless Claims, and PPI, so we should watch these closely.
Our Market:
Last week, both Nifty and Bank Nifty fell drastically due to F&O-related factors. Structurally, this indicates a clear bearish trend, but the RSI is suggesting a slight bounce back due to the occurrence of divergence. If this happens, we can expect a minimum of a 38% bounce back in the minor swing. We can discuss this in more detail in the charts. Additionally, we have a major event this week: the RBI Policy announcement.
Current View:
The current view based on the RSI data is as follows:
* The RSI divergence is likely to occur in the sub-wave 5. The structure suggests there is a 5th sub-wave forming. Once the market starts to bounce back, we can close the 5-wave structure in the 1st leg of the correction, leading into the 2nd leg.
* The ideal 2nd leg is a three-wave structure, which could take a minimum of 38% to 61% bounce back from the previous swing.
> In rare occasions, it could reach 78%. Structurally, it won’t go beyond this level; however, if it does, the overall trend will turn bullish.
* Once the three-wave structure (2nd leg) completes, the 3rd wave will begin. The 3rd wave is a correctional wave; if it rejects and cuts below the EMA20 line, we can assume that the downtrend may continue further. This is our first variation.
Alternate View:
* The alternate view suggests that if the week starts with a negative candle, it may evolve into a diagonal structure.
* A diagonal is a time adjustment pattern, so the correction could continue with some minor bounce backs.
* However, the diagonal also indicates a sub-wave of the 5th. Once the diagonal pattern breaks upwards, the previous sentiment will apply here as well, meaning we can expect a minimum of a 38% bounce back from the previous swing.
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