Elliott wave – Neo wave application with Hurst’s Time cycles on Nifty chart

Advanced Elliott wave – Neo wave helps to understand the overall maturity of the trend and provides the probable path prices can follow.

It is important to combine the application of wave theory along with price action for a clear trade setup and to stay objective.

Nifty Neo wave daily chart with Hurst’s Time cycles:

Elliott wave analysis:

As shown on above chart, prices are moving with high volatility since the top was formed near 21118 but moving in a broad range.

The movement on intraday basis has also been wild and it is important to combine the wave patterns with simple 3 rules of price action to stay objective.

As we can see in above chart post completion of wave (e) there was sharp decline on downside that hinted for possible completion of the up move and reversal on downside in form of wave (f). This wave (f) is supposed to be similar to that of wave (b) and show both price and time correction.

We can see that Nifty have been failing to show price correction since past few weeks but is showing time correction. This keeps the possibility still open that the downside move in form of wave (f) has started which might be possibly in Diametric pattern.

To ride the downside reversal we now need to see a faster retracement of the last rising segment which is from the lows of 21530 levels on short term charts or a reversal as per the 3 candlestick rules can be an early warning for prices to move back on downside.

Any breach above 22055 followed by 22118 will increase the possibility that wave (e) is not over but will take prices up trapping late entrants and then reversing back on downside. Given the recent price action this possibility has now opened up.

Hurst’s Time cycle – As per the concept of Time we are now near 75% if the cycle period. This is also the reason we are not seeing strong positive behaviour as time is not in sync for positive momentum yet.

In a nutshell, Nifty is now near the cusp with acceptance above 22055 to open the odds for wave (e) to continue whereas reversal on downside as per the 3 candlestick rules will indicate downtrend. These are times when just two days of more price action will confirm the pattern under formation with utmost clarity!

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