Nifty hits new high again and also given highest closing today. Today Nifty closed at previous all time high. I expected Nifty to touch at least 8393-8413 without breaking below 8322 in my yesterday’s report Elliott Wave analysis of Nifty for 12 Nov 2014 and Nifty moved as per expectations today. Let us see what charts are suggesting for next sessions.
This is 5 minutes time bar chart of Nifty covering move after 8290 (low of 5 Nov 2014).
Current set up on chart is not suggesting the progress of clean impulse as progress of wave 3 seems slower that wave 1. The whole move also not looks like a correction after seeing higher tops and higher bottoms. Both these conditions are signaling the formation of Ending Diagonal as move from 8290 till now can be identified as abc-abc-abc.
Now, if this is the progress of Ending Diagonal then Nifty to fulfill some conditions:
- Nifty to touch or break below the thin red line joining point (c) of (2) and (b) of (3) (lower thin red line in upwards slope) as no part of wave 3 should be below lower line of ED (line joining wave 2 and wave 4).
- Nifty should not break below the start of wave 3 (8304) as wave 4 can never go below the start of wave 3 in ED.
- There are possibilities for wave 4 to enter between lower red thin line and dotted blue line.
- And if these conditions are fulfilled then Nifty to show new high once again as wave 5 (unless wave 5 goes failure).
What if it is not an Ending Diagonal?
Even if it is not the progress of Ending Diagonal, Possibilities of new high are there as the whole pattern is not suggesting completion of wave yet.
Note: The whole pattern will be negated if Nifty breaks below 8304.
(The law behind the movement of Stock Market)