Friday, August 17, 2012

USDINR, the "Grind" continues!

Chart 1
This is my working count (Chart 1) so far. It will be, till we take out the top marked at (b). But there are a couple of different possibilities, marked on the charts below. Both the possibilities below are that of possible triangles, but in different waves. The details are discussed below.
Chart 2
This chart (Chart 2) shows a possible triangle in wave {b} of (b). Which means that once it is complete we will have a thrust from the triangle up wards, in wave {c} of (b). Once this wave (b) is done, we should come down, to complete wave (c).
Another way to count the price action is shown below (Chart 3). Here we may be forming a triangle in wave [4] itself, and may be pretty close to completing it. We have to come down a little in wave (e) of [4] before we embark on a thrust from the triangle in wave [5].
Chart 3
So in conclusion, we have two of three counts (Charts 2 and 3) suggesting an up move once the respective triangles are complete, whereas one count (Chart 1) suggesting immediate down move from current levels. The real question however is, how we trade this info at hand? I would share what I would do in such a scenario. Both the triangle scenarios shown above would get violated below 55.065, so as long as this level is protected, the triangle scenarios are possible. I will wait till 55.065 is taken out to initiate short positions, and keep stop loss for earlier short positions at 56.35. To initiate a long position I would wait for the market to come near the lower trend line of the triangles around 55.35-55.25 levels, and then keep a stop loss and reverse of 55.065, to play from the short side if the triangle scenarios are violated.

Trade Elliott Wave