Wave count update for Nifty movement from the lows of 10k in Oct'2018
Like I mentioned previously too, entire rise from 10K is looking like a complex corrective which is clearly visible because of so many overlapping waves and on a bigger time frame this rise from 10k to present levels is "B" leg of a new corrective or "E" leg of an extracting triangle. For now lets assume its "B" leg of new corrective ( fall from 10750 to 10K level being the "A" leg as explained in the Nifty medium term outlook).
Now we have been saying that this B leg is developing as "7 legged diametric" pattern ( once this diametric is completed Nifty is likely to open a new leg downwards. However inspite of completing more than 2 months, this diametric is still ongoing. Currently there are 2 possible outcomes. lets discuss each possibility in detail.
Option 1: One possibility is that "f" leg got completed at lows of 10700 (in Jan) and after that "g" leg is developing as an irregular corrective pattern. Now theoretically "g" leg can mimic "a" leg ( which measured 600-700 points). So its possible that G leg can touch anywhere from 11200-11400 before starting a new leg down. However if the fall continues and Nifty break below 10580 in next3 days then it would mean "g" leg got over at 11118 ( probability of this happening seems pretty low as of now)
Option 2: Another option is that "g" leg got over at 10987 as failure pattern and what followed after that ( fall from 10987-10583) was an "x" wave post which Nifty has opened another corrective. Now considering various factors this is looking like a more probable and acceptable count. Implications of market opening another corrective are more or less same as option 1 only thing is that in this scenario Nifty probably can spend a bit more time in this corrective move ( B leg can stretch for some more time and can even see slightly higher levels). Rise from 10583 to 11118 levels is looking like a impulsive move ( "A" leg of new corrective) and it even broke the range market has been trading in since last 2 months. Now the fall we are seeing ("B" leg from 11118 to 10820 today) is a mixed bag but it remains to be seen till what level it retraces the entire rise. At todays low of 10820 its still less than 61.8%. If Nifty fall further from here and retraces more than 61.8% ( 10787 levels) then probably this second corrective is developing as a triangle ( probably as ending diagonal) which means Nifty can still touch higher levels (11300-11400). However it may also starts developing as contracting triangle in which case there will be no high ( 11118 will be top) but even then Nifty might still see 11K+ levels before starting the downtrend. However if 10787 is protected then probably its developing like a simple zig-zag which opens up a possibility of a sharp upmove from current levels.
So doesn't matter which way you see, there is still a possibility for Nifty to move up in near term ( anywhere from 11k to 11400) and someone looking to short ideally should wait for some more time. Current developments in market are not suggesting a "short and hold" scenario and there remains a possibility of nifty moving up sharply and trapping traders on the wrong side or market may just tire out traders by not giving breakout/breakdown ( or by entering into a new trading range) anytime soon.
Ever since Nifty hit 10800 in December, its giving a hard time to traders which is expected during a complex corrective. Whole purpose of a complex correction is to push traders away from markets but as the time is passing by, markets are indicating they are pretty close to finishing this complex corrective and getting into a trending move.
Like I mentioned previously too, entire rise from 10K is looking like a complex corrective which is clearly visible because of so many overlapping waves and on a bigger time frame this rise from 10k to present levels is "B" leg of a new corrective or "E" leg of an extracting triangle. For now lets assume its "B" leg of new corrective ( fall from 10750 to 10K level being the "A" leg as explained in the Nifty medium term outlook).
Now we have been saying that this B leg is developing as "7 legged diametric" pattern ( once this diametric is completed Nifty is likely to open a new leg downwards. However inspite of completing more than 2 months, this diametric is still ongoing. Currently there are 2 possible outcomes. lets discuss each possibility in detail.
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| Nifty |
Option 1: One possibility is that "f" leg got completed at lows of 10700 (in Jan) and after that "g" leg is developing as an irregular corrective pattern. Now theoretically "g" leg can mimic "a" leg ( which measured 600-700 points). So its possible that G leg can touch anywhere from 11200-11400 before starting a new leg down. However if the fall continues and Nifty break below 10580 in next3 days then it would mean "g" leg got over at 11118 ( probability of this happening seems pretty low as of now)
Option 2: Another option is that "g" leg got over at 10987 as failure pattern and what followed after that ( fall from 10987-10583) was an "x" wave post which Nifty has opened another corrective. Now considering various factors this is looking like a more probable and acceptable count. Implications of market opening another corrective are more or less same as option 1 only thing is that in this scenario Nifty probably can spend a bit more time in this corrective move ( B leg can stretch for some more time and can even see slightly higher levels). Rise from 10583 to 11118 levels is looking like a impulsive move ( "A" leg of new corrective) and it even broke the range market has been trading in since last 2 months. Now the fall we are seeing ("B" leg from 11118 to 10820 today) is a mixed bag but it remains to be seen till what level it retraces the entire rise. At todays low of 10820 its still less than 61.8%. If Nifty fall further from here and retraces more than 61.8% ( 10787 levels) then probably this second corrective is developing as a triangle ( probably as ending diagonal) which means Nifty can still touch higher levels (11300-11400). However it may also starts developing as contracting triangle in which case there will be no high ( 11118 will be top) but even then Nifty might still see 11K+ levels before starting the downtrend. However if 10787 is protected then probably its developing like a simple zig-zag which opens up a possibility of a sharp upmove from current levels.
So doesn't matter which way you see, there is still a possibility for Nifty to move up in near term ( anywhere from 11k to 11400) and someone looking to short ideally should wait for some more time. Current developments in market are not suggesting a "short and hold" scenario and there remains a possibility of nifty moving up sharply and trapping traders on the wrong side or market may just tire out traders by not giving breakout/breakdown ( or by entering into a new trading range) anytime soon.
Ever since Nifty hit 10800 in December, its giving a hard time to traders which is expected during a complex corrective. Whole purpose of a complex correction is to push traders away from markets but as the time is passing by, markets are indicating they are pretty close to finishing this complex corrective and getting into a trending move.
