Nifty after struggling for direction has decisively made a trending move towards the downside. The momentum and strength of the fall has forced a minor change in wave count. In the previous analysis we expected the wave 3 of the move which started from 7893 got over at 10,137 but in the current version there are two possibilities and the good news is that the ongoing correction has made Nifty even more bullish . If you recollect on Oct 20th I had explained that unless and until Nifty captures 10,557 the move which started from 7,893 won't be complete. Since Nifty moved lower without touching 10,557 indicates that the wave 5 of the move which started from 7,893 is not complete so Nifty will have to make a new ATH after this correction to complete the move. If you watch the charts you can see that Nifty is trading beautifully inside two channels(red and blue) and 10,490 was a level where both these channels strongly resisted Nifty from moving higher.Now let us analyse the possibilities in detail.
Possibility 1 : This possibility is an extremely bullish scenario under which we completed the wave 3(3) of the move which started from 7,893 at 10,490. Nifty is in wave 4(3) after which Nifty will proceed to make a new ATH . Under this scenario Nifty will form a bottom anywhere between 10,095-9865(23.6 & 38.2 fibo levels of the move 8,860-10,490) before zooming higher. The blue channel line support is at around 9950-9920 so that zone will be very crucial. In this scenario Nifty should move higher without breaking much below the 9900. Blue lines show the anticipated Nifty trajectory.
Possibility 2: This possibility counts wave 3 of the move which started from 7,893 got completed at 10,490 and currently Nifty is undergoing wave 4 correction after which Nifty will proceed to make a new ATH . Under this scenario Nifty will form a bottom anywhere between 9956-9624(23.6 & 38.2 fibo levels of the move 8,230-10,490) before zooming higher. If Nifty is tracking this wave count then the red lines show the anticipated Nifty trajectory.
In both situations Nifty is expected to bottom out either at 9900 or in worst case 9700 before moving higher to make a new ATH . If Nifty decides to test 9700 then we could see some decent consolidation between the levels 10,250- 9950 before breaking lower to test 9700. For investors it is great time to look at the stocks to buy and start investments at levels mentioned above. For traders 9900-9950 will be a great zone to initiate some long trades expecting levels of around 10,250 which could extend to ATH as well.
Please note that these are views based on the my limited capabilities as an EW analyst and there are multiple ways to analyse the markets . Kindly do your own analysis or check with your financial analysts before taking any decisions.
Good Luck Traders !!!
Possibility 1 : This possibility is an extremely bullish scenario under which we completed the wave 3(3) of the move which started from 7,893 at 10,490. Nifty is in wave 4(3) after which Nifty will proceed to make a new ATH . Under this scenario Nifty will form a bottom anywhere between 10,095-9865(23.6 & 38.2 fibo levels of the move 8,860-10,490) before zooming higher. The blue channel line support is at around 9950-9920 so that zone will be very crucial. In this scenario Nifty should move higher without breaking much below the 9900. Blue lines show the anticipated Nifty trajectory.
Possibility 2: This possibility counts wave 3 of the move which started from 7,893 got completed at 10,490 and currently Nifty is undergoing wave 4 correction after which Nifty will proceed to make a new ATH . Under this scenario Nifty will form a bottom anywhere between 9956-9624(23.6 & 38.2 fibo levels of the move 8,230-10,490) before zooming higher. If Nifty is tracking this wave count then the red lines show the anticipated Nifty trajectory.
In both situations Nifty is expected to bottom out either at 9900 or in worst case 9700 before moving higher to make a new ATH . If Nifty decides to test 9700 then we could see some decent consolidation between the levels 10,250- 9950 before breaking lower to test 9700. For investors it is great time to look at the stocks to buy and start investments at levels mentioned above. For traders 9900-9950 will be a great zone to initiate some long trades expecting levels of around 10,250 which could extend to ATH as well.
Please note that these are views based on the my limited capabilities as an EW analyst and there are multiple ways to analyse the markets . Kindly do your own analysis or check with your financial analysts before taking any decisions.
Good Luck Traders !!!