Date: October 2012: IBEX: Follow up of the short term EWP | The wave trading

This is a brief update of the short term scenario I posted on September 26.

So far the scenario that I am following is on track

Price completed the first down leg of a likely larger corrrection on September 28 at the Double Top target.

The following bounce is clearly corrective therefore I expect at least one more down leg.

Below we have a strong support in the range 7554 – 7494, where we have the 200 d MA, 50 d MA and a gap that can be filled.

If this support layer does not hold then the following support is located in the range 7354-7161.

If we look at the internal structure of the pullback from the September 21 high, we can make the case that the first down leg can be label as a wave (A) or (1) while the following rebound is clearly corrective and could be shaping a bearish flag.

The obvious reversal area is located at the horizontal support and 0.618 retracement = 8021

If the current countertrend rebound estabslihes the high at 8021 then the next leg down has an extension target in the range 7470-7129