Nifty opened Gap Up today and bounced
sharply till 8278 within next 10 minutes of opening and traded with strength
whole day followed by a decline of 30 points in the end session. Nifty moved as
per my expectations and closed 45 points green at 8246 after registering day’s
high 8278. Let’s see what charts are suggesting.
This is 5 minutes time bar
chart of Nifty showing bounce after 8148 which I am assuming as start of next
upside impulse.
It seems wave (1) and (2) of
next up move is already completed and (3) is in progress. Within (3), it seems
wave (i), (ii), and (iii) are completed and wave (iv) is already completed or
about to complete. Wave (iv) corrected more than 23% till now and 38% retracement
placed at 8236.
Wave (iv) seems progressing as
Triple Zigzag Correction (abc-x-abc-x-abc) which is already completed or about
to end and confirmation will be after breakout from upper line (line joining by
both (x) waves) of wedge/triangle marked by brown circle. I am expecting wave
(iv) as Triple Zigzag Correction because it is making Contracting Triangle
Pattern after drawing lines through extremities and I can also see repetition
of “abc” cycles in between.
So, if it is actually a Triple
Zigzag than Nifty can bounce well above 8278 again after breakout.
Conclusion:
Current set up on chart is
suggesting upside well above 8278 as Nifty is still within wave (3) whereas
wave (4) and (5) is yet to be completed. The stop loss for existing longs should
be 8227 spot, below 38% retracement of wave (iii) as wave (iv) rarely retrace
more than 38%. Fresh longs can be initiated only if Nifty break above upper
line of Triple Zigzag Correction with recent low as stop loss for targets of
8280 and above.
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