Nifty 1 min chart shows clearly how this a-b-c up move has played out. This over shoot the triangle trend line, just to complete the 'D' wave. And return back into the trend line, indicating the false breakout!
Nifty 1 min chart zoomed in:
Nifty 1 min chart showing the entire triangle formation:
Now let us step back and observe the hourly chart and hourly 9 RSI chart:
Nifty hourly chart with 9 RSI
We can observe the triangle pattern in the RSI data as well!
This turned out to be not a triangle but an a-b-c which gave a false perception of a triangle. Infact our labeling itself was not right. Looking closely at the internal structure of the waves in a smaller time frame like a 5 min chart reveals a different story.
ReplyDeleteOne such possibility is labeled in the following chart.
http://diary4trader.blogspot.in/2016/08/nifty-intraday-26-08-2016.html