Waves structure of Indian markets is as follows:-
Nifty topped at 6357 on 08-01-2008 and Indian markets corrected that rally which started on 28-04-2003 from 929.50. 2008 was correction year and Nifty corrected in 5 waves upto 2252 on 27-10-2008. Indian markets remained range bound and consolidated 5 months within 2500-3100. Fresh rally started in March 2009 and:-
1- 1st impulsive wave begining from 2252(27-10-2008) got confirmation.
2- 1st wave finished at 4693 on 12-06-2009 and 2nd corrective wave started.
3- 2nd corrective wave finished at 3919 on 13-07-2009 and 3rd impulsive wave started.
Wave-1 gained:-4693-2252= 2441 points
As per Eliot Wave theory "Wave-3 can not be shorter than both wave-1 and Wave-5 therefore Wave-3 was bound to gain minimum points of Wave-1(2441)
Wave-3 minimum target was:- 3919(started from)+2441(minimum gain)= 6360
Wave-3 tested 6339(21 points short from its minimum target) on 05-11-2010 and "ABC" correction begun. Although Nifty could not got its minimum target(6360) and remained short by only 21 points but in 2420 points rally mere 21 points shorting is negligible and:-
4- 3rd impulsive wave termination at 6339 is confirmed on 05-11-2010 and 4th corrective wave started same day.
1- Waves Structure of Indian markets Chart:-
5- Wave-4 corrective wave has to correct 2440 points up move of Wave 3 and Fibonacci retracement levels of Wave-3 are as follows:-
38.2%- 5414(Has been corrected)
50.0%- 5129(Has to correct)
61.8%- 4843
70.7%- 4628
76.4%- 4490
78.6%- 4436
88.6%- 4194
2-Fibonacci Correction levels of Wave-3 Chart:-
6- Wave-4 is correcting in "ABC" waves and according to "ABC" waves structure correction Targets are as follows:-
1- 'A' Wave- 6339-5690= 649 points down
2- 'B' Wave- 6181-5690= 491 points UP
3- 'C' Wave- Target-
1-6181-649(100.0% Retracement)=5532
2-6181-897(138.2% Retracement)=5284
3-6181-974(150.0% Retracement)=5207(Has been corrected)
4-6181-1050(161.8% Retracement)=6131(Has to correct)
3-ABC corrcetion Chart:-
Conclusions
Termination point of Wave-4 and begining of Wave-5 level has to be acquired. Possibilities are as follows:-
1- Wave-3 Fibonacci retracement 50% level is at '5129' and "C" Wave 161.8% Retracement target is at '6131' therefore "Wave-4 termination snd Wave-5 begining possibility near 5130 is high."
3- As Nifty got good support near 5200 and reversed sharply from 5177 on 11-02-2011 therefore termination of Wave-4 and begining of Wave-5 can not be ruled out last Friday.
Either Wave-5 has been started last Friday after completion of "ABC" correction or will positively start from 5130 which is support from 2 different technical angles.
As per my view Rally(Wave-5) has started from 5177 last Friday and sustaining above 5210 will be 100% confirmation.