11413.85 will confirm Rally continuation or 5 Waves Correction after Budget
Technical Analysis,Research & Weekly Outlook
(Jan 29 to Feb 02,2018)
Waves structure from 27-10-2008
Nifty-EOD Chart (25-Jan-2018):-
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| Just click on chart for its enlarged view |
1- Impulsive Wave-1 beginning from 2252.75 on 27-10-2008 after 2008 big correction completion
2- Impulsive Wave 1(6338.50 on 05-11-2010) completion and corrective Wave 2 beginning
3- Wave 1 gained 4085.75 points
4- Corrective Wave-2(4531.15 on 20-12-2011) completion and impulsive Wave 3 beginning
5- Impulsive Wave 3(9119.20 on 04-03-2015) completion and corrective Wave 4 beginning
6- Wave 3 gained 4588.05 points
7- Corrective Wave-4(6825.80 on 29-02-2016) completion and impulsive Wave 5 beginning
8- Impulsive Wave-5 continuation with recent top formation at 11110.10 on 24-01-2018
9- On going impulsive Wave-5 has gained 4284.30 points till 24-01-2018
Conclusions from EOD chart analysis
Indian markets are very much on with continuous new life time high formations and recent top formation at 11110.10 on 24-01-2018. As all the indicators from very Short to Long are overbought therefore correction is very much due but indicators remains overbought long time during Bull markets and until complete selling pattterns will not develop on EOD cahrts till then any deeper correction will not be seen.
Indian markets are tend to move in 7/8 years time cycles in following manner:-
1- In Apr 1992 -Rally finished after Harshad Mehta scam
2- In Jan 2000 -IT Rally finished after Ketan Parikh scam
3- In Jan 2008 -Rally finished after Lehman brothers scam
On going rally started in Apr 2009 after 2008 Correction completion at 2252.75 on 27-10-2008 and 5 months sideways consolidation. Now on going rally is more than 9 years old and time wise correction is also due.
Calculation of maximum target of Nifty at 11413.85 as follows:-
As per Elliott Wave theory "Wave-3 should not be shorter than both Wave-1 and Wave-5. Now impulsive Wave-5 is on and it should not gain more points than Wave-3 gained.
Impulsive Wave-1 gained=4085.75 points(6338.50-2252.75)
Impulsive Wave-3 gained=4588.05 points(9119.20-4531.15)
Impulsive Wave-5 has gained 4284.30 points till 24-01-2018(11110.10-6825.80)
As according to Elliott Wave theory Wave-5 can not gain more points than Wave-3 gained therefore on going impulsive Wave-5 will gain lesser points than 4588.05.
Impulsive Wave-5 started from 6825.80 on 29-02-2016 and it has to gain less than 4588.05 points therefore maximum target of on going impulsive Wave-5 is 11413.85(6825.80+4588.05)
As Union Budget on 1st Feb 2018 and its announcements will form next decisive moves but firstly sustaining beyond 11413.85 should be watched in the coming weeks after Budget because 11413.85 is most crucial. As per Elliott Wave theory if Nifty sustains above it then Waves structure from 27-10-2008 will be recounted and sustaining below it will mean 5 waves correction of whole rally from 2252.75 to any highest below 11413.85.
Let complete selling patterns develop on EOD charts and correction beginning confirmation come then lower levels will be updated after rally top formation confirmations.