Hi, I’m not an expert in EW. I’m a learner too… I just started using it for quite sometime now.
Coming to the CNX Smallcap index, I’m not considering a recount of smallcap index for the following reasons.
When I observed that CNX Smallcap is approaching the invalidation level, i.e 6040. I wanted to take a look at its twin, the BSE Smallcap index to see where it is standing. What I see is, theres more room left for the invalidation level in BSE Smallcap, also both the small cap indices moves in tandem.
Hence I won’t call for a recount in a hurry. When i get confusion in candlestick, where the wicks may overlap with other wave’s top, I do consider what the line chart says. There’s no written rule that one should use only candlestick for the EW, people even use Renko charts for EW counts. So as per that Even the CNX Small cap yet close below 10800 level.
This is my EW count for BSE Smallcap.
Here’s the comparison with the CNX Smallcap(NSE)
Orange line: CNX Smallcap
Candle Stick: BSE Smallcap
And marked their wave 1 level in the chart.
The levels are indexed to 100. This was drawn 5 days ago. We still have enough room to call for a recount.
If you see the weekly & daily RSI convergence. During an impulsive wave, if I see this convergence in overbought zone, that most probably indicates the top of the impulsive wave. During the corrective waves, if I see this convergence in the oversold zone, I consider it as the bottom is approaching, that is wave C is gonna end. Sometimes, if the conditions doesn’t allow, this may languish in the oversold zone for quite sometime.
PS: This is just my view by applying EW guidelines. Not a trading reco, just for education and understanding the market direction.