Nifty opened Gap Up today but
declined sharply after opening and traded with negative bias though out the day
followed by sharp bounce in last session. Nifty closed 1 point up at 8248 after
registering the low of 8211. Let us 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, 2, 3 and 4
are already completed and wave 5 is in progress. The wave I am marking as 3 and
4 also have possibilities to be inner waves (iii) and (iv) of 3 which I shown
in my yesterday report. Confusion between 3 and 4 or (iii) and (iv) of 3 will
be cleared tomorrow or later and we need to wait for that. But, in both cases
Nifty needs to break above high again.
Wave (4) seems completed as
Double Zigzag (abc-x-abc) as marked on chart. I am assuming it as double zigzag
as it is not forming clear wedge pattern if I draw line joining end points.
If I am right at identifying
then Nifty can move above 8278 once again tomorrow. There is identification of
small wave 1,2 and 3 at the end (marked by blue rectangle). Let us see that
move closely.
This is again 5 minutes time
bar chart of Nifty showing move after today’s low 8221. It seems wave 1 and 2
are completed and 3 is in progress. Wave 2 seems like Complex Correction (Triple Zigzag ) as nature of breakout after completion is also convincing.
Nifty didn’t enter in wedge again after breakout. This condition is also
suggesting more upside but it should not break below 8238 again to remain in
this pattern.
Conclusion:
Current set up on chart is
suggesting upside well above 8278 and stop loss for existing longs should be
8238 spot now. I exited my previous longs when Nifty opened above 8250 but
break below 8240 (as I mentioned in my yesterday report). I initiated longs again
around 8235 with stop loss of 8219.7. I bought at 61% retracement of wave 1
with stop loss below start of wave 1 (shown in second chart) and also posted on
my Facebook group “Practical Application of Elliott Wave Theory”. And I am
holding my longs with 8238 spot as stop loss for tomorrow.
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