Nifty and the Wave counts

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 Nifty daily chart


Nifty 2 hour chart


India VIX


Analysis

Nifty is moving in a lower highs and lower lows, though it went above its previous high last week and I went wrong in anticipating the fall. As market is now going to fall in impulse fashion I am of the opinion that market is likely to collapse but will be corrective in structure.

As seen in the daily chart, prices are moving in a falling channel with RSI exhibiting negative divergence for the third time which is an indication of a caution. Also to understand the VIX chart, prices have arrived near to 12 years low the lower horizontal line, thereby opening a possibility of a reversal in prices coming soon.

From 2 hour chart, the index is moving in a higher highs and higher lows in a falling channel (big) and also currently moving in an impulse fashion. However, there is a strong built up of CE sellers at 18600-18800 levels which will act as a resistance for now. Also there is a room for 100 points higher from here which can terminate the ongoing corrective leg.

Wave theory indicates, prices are moving in a flat pattern (a-b-c) where wave a is over, wave b is in zigzag and can go near till 18600 levels and then wave c on the lower side which can drag prices near in the range of 18100-18000.

The summation is Nifty has a resistance placed at 18600 and there is a high chance for the index to change the direction from this level. On the downside the benchmark can move towards 18100-18000 price range. 

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