I had posted my views on Nifty a long time back in Nifty 14 January 2014 : Three Wolves, All Pointing Downwards and Alive. While one of these wolves met the target, other two fell short. Subsequent rise continued to push Nifty towards unscaled levels and here it is...at levels that may be extremes of some of the possibilities. Let us see how Nifty is shaping up.
Monthly
In monthly, the price action has reached the UTL of a very LT EW channel. Getting resisted here is highly probable. Another aspect that needs to be kept in mind is that the move from 6357 (marked as A) continues to hold the possibility to turn into an expanded till 7925. If we look at the indicators, the negative divergence in both RSI and BEBO are held wrt A, but, there is no negative divergence within the move from 2252 (marked B). I infer that the current rise still holds momentum for newer highs in future.
Weekly
The EW labels and possible channels, as perceived by me, are marked on the chart below. No negative divergence visible in both RSI and BEBO. The EW ratios work out as below and clearly shows that the current move from 5118 as 3 has become extended:
While we can delve deeper in the monthly and weekly charts later as the moves evolve, let us see certain key elements of the daily chart.
Firstly, in the above counts, ii and iv both are shallow. I have seen it happening on occasions and hence tend to accept it for the time being. Within iii, the (iv) is just 17.66 % and this one is also accepted with a pinch of salt.
Now, if this is how nifty is shaping up, then,
v should finish between 7920 (already done) and 8126. If 8126 is violated, nifty will have to scale 9217 to make v extended wrt i.
To resolve the possibility of an expanded move from 7808, nifty need to cross 7956. If it does not, the possibility will remain alive.
If v is developing as an ED as shown, maximum it can go is upto 7959. Above this, (iii) of the ED will become smallest, which is not permissible and a reorientation will be necessary.
Given these parameters, 7920-7925 and 7956-7959 bands are crucial. Ideally, if Nifty reverses from 7956-7959 band, all expanded possibilities would have resolved and what will follow would be 4 that may bring a decent reduction to the levels of Nifty. Minimum expectation will be 7260 at 23.6%.
Monthly
In monthly, the price action has reached the UTL of a very LT EW channel. Getting resisted here is highly probable. Another aspect that needs to be kept in mind is that the move from 6357 (marked as A) continues to hold the possibility to turn into an expanded till 7925. If we look at the indicators, the negative divergence in both RSI and BEBO are held wrt A, but, there is no negative divergence within the move from 2252 (marked B). I infer that the current rise still holds momentum for newer highs in future.
Weekly
The EW labels and possible channels, as perceived by me, are marked on the chart below. No negative divergence visible in both RSI and BEBO. The EW ratios work out as below and clearly shows that the current move from 5118 as 3 has become extended:
| 1 | : | 4531 | - | 6229 | = | 1698 | |||
| 2 | : | 6229 | - | 5118 | = | -1111 | ( | -65.4299 | ) |
| 3 | : | 5118 | - | 7922 | = | 2804 | ( | 165.1355 | ) |
Daily
The EW labels and possible channels, as perceived by me, are marked on the chart below. Negative divergence is visible in both RSI and BEBO. But the pattern of the indicators keeps me concerned on the positioning of black iii. The EW ratios work out as below and clearly shows that the current move from 5118 as 3 has become extended:
| i | : | 5118 | - | 6415 | = | 1297 | |||
| ii | : | 6415 | - | 5933.3 | = | -481.7 | ( | -37.1396 | ) |
| iii | : | 5933.3 | - | 7563.5 | = | 1630.2 | ( | 202.9 | ) of v |
| iv | : | 7563.5 | - | 7118.55 | = | -445 | ( | -27.2942 | ) |
| v | : | 7118.55 | - | 7922 | = | 803.45 | ( | 61.9468 | ) of i |
While we can delve deeper in the monthly and weekly charts later as the moves evolve, let us see certain key elements of the daily chart.
Firstly, in the above counts, ii and iv both are shallow. I have seen it happening on occasions and hence tend to accept it for the time being. Within iii, the (iv) is just 17.66 % and this one is also accepted with a pinch of salt.
Now, if this is how nifty is shaping up, then,
v should finish between 7920 (already done) and 8126. If 8126 is violated, nifty will have to scale 9217 to make v extended wrt i.
To resolve the possibility of an expanded move from 7808, nifty need to cross 7956. If it does not, the possibility will remain alive.
If v is developing as an ED as shown, maximum it can go is upto 7959. Above this, (iii) of the ED will become smallest, which is not permissible and a reorientation will be necessary.
Given these parameters, 7920-7925 and 7956-7959 bands are crucial. Ideally, if Nifty reverses from 7956-7959 band, all expanded possibilities would have resolved and what will follow would be 4 that may bring a decent reduction to the levels of Nifty. Minimum expectation will be 7260 at 23.6%.
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