Nifty: Elliott Wave Analysis

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 Nifty daily chart


Nifty 2 hour chart


Nifty last week has consolidated in the range of 15700-15800 levels, only on the last day of the trading week, it came close to my stop loss of 15500 levels but failed to trigger it. In my previous report I had opened the possibility of re-testing the neckline of an inverse head and shoulder pattern. The benchmark exactly tested or tried to test the neckline and reversed in the second half of Friday’s trading, back in the buying range of 15700-15800 levels.

From daily chart, the index filled all the pending gaps down and closed in a positive terrain, thus forming a long legged candle indicating that the bulls have the upper hand. Last 4 trading sessions prices consolidated in a stiff range but ROC continues to exhibit positive sign, staying well above the center line. Also the benchmark is facing resistance of 20 EMA (red), it is imperative for prices to move above this moving average which can then open the resistance of 50 SMA (blue) placed at 16200 levels, thus closing falling gap.

As shown in 2 hour chart, the inverse head and shoulder pattern is still intact and it tested the neckline and now it is all set to move back up and test the resistance of the falling small channel. The first key resistance will be 16000 for Nifty. RSI is also well above the center line of 50, giving positive signals.

Elliott Wave theory suggests, prices have completed wave a at 15924 and wave b at 15513 last week and now wave c higher is on the way. Wave c is likely to be impulse and it will reach 16000-16200 levels over short term.

The summation is Nifty can reach till 16000 levels followed by 16200 or close to it. The bias remains positive for the index as far as 15500 levels is intact on the downside (closing basis).


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