Rally continuation amid only a Very Short Term correction possibility
Technical Analysis,Research & Weekly Outlook
(Apr 22 to Apr 26,2019)
Nifty-EOD Chart (18-Apr-2019):- |
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1- Impulsive Wave-1 beginning from 6825.80 on 29-02-2016 after 1 financial year(2015-16) correction completion.
2- Corrective Wave 2 beginning after Wave 1 completion at 8968.70 on 07-09-2016
3- Wave 1 gained 2142.90 points
4- Impulsive Wave 3 beginning after Corrective Wave-2 completion at 7893.80 on 26-12-2016
5- Corrective Wave 4 beginning after Wave 3 completion at 11760.20 on 28-08-2018
6- Wave 3 gained 3866.40 points
7- Impulsive Wave 5 beginning after Corrective Wave-4 completion at 10004.55 on 26-10-2018
8- Impulsive Wave-5 continuation with new life time top formation at 11856.15 on 18-04-2018
Nifty-Intra Day Chart (18-Apr-2019):-
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1- Profit booking and slipping after strong gap up opening and new life time high formations
2- Last 5 hours trading with Mixed Patterns formation between 11739-11792
3- Whole day actual trading between 11739-11856
Conclusions from EOD chart analysis
Indian markets are very much Bullish and new life time high formation was seen at 11856.15 in previous trading session on 18-04-2018.
As per Elliott Wave theory calculation maximum target of on going Nifty rally is at 13870.95 and it is being explained 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(3866.40 points).
Impulsive Wave-1 gained=2142.90 points(8968.70-6825.80)
Impulsive Wave-3 gained=3866.40 points(11760.20-7893.80)
Impulsive Wave-5 has gained 1851.60 points till 18-04-2018(11856.15-10004.55)
As per Elliott Wave theory Wave-5 can gain 3866.40 points from its beginning level(10004.55 )which means that on going Wave-5 has potential to move up to 13870.95(10004.55+3866.40)
Conclusions from intra day chart analysis(18-04-2018)
Although strong gap up opening and new life time high formations at 11856.15 on 18-04-2019 but profit booking developed immediately after opening and nifty slipped more than 100 points in first hour which is first signal of Very Short term correction beginning.
As last 5 hours trading with Mixed Patterns formation between 11739-11792 therefore firstly sustaining beyond this range should be watched in the beginning of next week for Very Short term correction beginning below 11739 and on going rally continuation after fresh consolidation above 11856.
Conclusions (After Putting All Studies Together)
Rally is very much on and its continuation is expected but all the indicators from very Short to Long term 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 and intraday charts till then any deeper correction will not be seen.
As some selling was seen on 18-04-2018 therefore eruption of Very Short Term correction possibility but follow up selling is must and sustaining beyond 11739-11792 should be firstly watched in the beginning of next week for correction beginning or rally continuation after follow up consolidation.