Decoding Nifty ahead of RBI policy

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Nifty (Daily Chart)


Last week Nifty fell 2% from the all time high of 10179 levels. Mid caps and small caps eroded all the recent gains which eventually ended up in a pain. 

This week there is an RBI policy meet  lined up and looking at the recent momentum of the benchmark it is quite visible that the negative trend will continue. Nifty as of now have not broken any of the previous lows. Last week it made a low of 9687, thus protecting its previous low of 9685. 

However, looking at the current structure it is possible that several supports are likely to be broken. As per wave theory, after making a high of 10179, prices fell in an impulsive fashion which was completed when it made a low of 9687. The recent 3 day up move is corrective in nature and can be wave ii of wave c on the downside. 

According to Fibonacci projection prices have retraced 100% of wave a. Wave c can extend till 161.8% of wave a which can move down till 9500 levels in near term.

In short, RBI policy might introduce the volatility in the market but the negative trend will continue dragging prices lower till 9500.



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