- ROC on 30 mins shows strong recovery and positive divergence
- Corrective channel support lies at 5430 shown on 30 mins chart
Combining the power of Elliott wave along with Gann and traditional technical tools
Nifty 10 mins chart shows minute degree wave counts. It is very difficult to explain the nesting of wave counts and it can be very confusing. On 10 mins chart, blue line shows one possibility whereas red line shows the other possibility. A break of 5541 is deciding factor to confirm which possibility is developing. Friday’s consolidation completes Time correction but we might be moving in an expanding triangle rare pattern and one leg e to the upside (shown in red) is pending which might take us near 5682 from where the leg (c) down shall start.
To avoid the complexity and confusion of wave counts, in short we wait for negative confirmation below 5541. As long as 5541 is not taken out on downside we might see a rally till 5682 which shall act as a strong resistance level!
Given strong RSI divergence on 20 mins chart we think Nifty will either move sideways to digest such a huge gain in past one week or might start correcting the entire move up before breaking 5700. Also Reliance (chart shown below) has perfectly retested the resistance line and now looks ripe to start downward correction. If that happens it might drag Nifty down along with it atleast to certain extent.
In short, we will remain very cautious here and observe if Nifty breaks below 5583 or attempts to cross above 5700 levels, to understand further price action!