The rally took the market to 5178. How are we placed technically. Lets take a look at few of the Technicals which could give us a clue about the markets.
1. The lower end of the Bollinger Band was touched and at around 4950 and then the markets rebounded. The Bollinger bands had narrowed and now they have started widening. The upper end has moved to 5208 from 5181 and the width was around 230 points when the bands were narrow. This could mean a rally till 5310.
2. The markets took support from around the 50 EMA, and I have observed whenever the markets take support around this level, they do not touch the 50 EMA again for at least 2-3 weeks. The supports are at 5062 and 5001.
3. The trend line joining the tops from June gives a Target of around 5400.
4. On the weekly charts, the supports are at 5159 and 5076.
5, If we take a 5 wave up move from 4539, wave 1 ended at 5181, wave 2 at 4807, wave 3 at 5182, wave 4 at 4944. Wave 3 is never the shortest of 1,3 and 5. So, it should be less than wave 3 and end before 5319.
Alternatively, if this count is wrong, we could go higher.
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