Possible Elliot Wave Analysis - Nifty

NSE:NIFTY   Nifty 50 Index
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In my previous analysis on Nifty I presented the possibility that Nifty could be headed lower towards 9700 in a wave 4 correction within the larger wave 3. During the last month Nifty consolidated between 10,300-10,640 but was unable to move higher above 10,640 . The fact that Nifty couldn't move past 10,640 in somewhat favorable global environment was a worrying factor for bulls. Now that Nifty has comfortably broken below 10,276 let us look at the possibilities that could decide the market direction in the near term.

As per my analysis Nifty has started the C wave of a Zigzag correction which could take Nifty all the way down to levels closer to 9,200. The possibility that wave C extends 1.618 times wave A is very high at the moment as wave B could only retrace 0.382 of wave A. I expect this move to be very sharp and violent so be very careful in buying before seeing the bottoming out signals. There is a high probability that we could see those levels in this month itself so expect action packed days ahead. Blue line represents the market trajectory if my assumptions are correct. Long term investors should be ready to deploy cash at levels closer to 9200.

The secondary possibility is the only hope for the bulls at the moment which assumes the consolidation between 10,300-10,640 was a wave 4 and Nifty is close to forming a wave 5 low after which Nifty could give a good pullback. Red line represents the optimistic scenario.

Please consult your financial advisers before making any decisions.

Good Luck Traders !!!

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