Nifty opened 90 points gap up today and continued its strength after a small decline and also increased the possibilities of move towards new high in near term. Nifty closed 130 points up from previous close. Let see what charts are suggesting.
This is daily time bar chart of Nifty covering move after June 2014 low of 7118. The chart is suggesting that the move after 7118 is progressing and Ending Diagonal and final upside wave (c) of (5) of this Ending Diagonal has started from Yesterday’s low 7961. Generally this upside wave (c) of (5) needs to break previous high 8626 to complete pattern. Now, we need to see the bounce after low 7961 on 5 minutes chart.
Read complete details at Medium Term Elliott Wave Analysis of Nifty dated 10 Dec 2014
This is 5 minutes time bar chart of Nifty covering move after low 7961. This chart is suggesting that wave (1) and (2) of big (c) is completed and inner wave (iii) of (3) is in progress.
If I am right at identifying then Nifty can move higher without breaking below 8080 as wave (iv) of (3) cannot overlap wave (ii) of (3) and (ii) started from 8082. Pattern will be negated if Nifty break below 8080.
Conditions on chart are suggesting buying on Dips only till 8626 or till we identify something else. And positional stop loss for existing longs should be 8080. Any fresh trade can be done after identification of corrections during live market hours. Shorts must be avoided above 8080.
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