Crucial levels to watch!

Sensex Daily

Nifty 15 mins

Sensex moved down impulsively on 9th loosing almost 500 points in a single day. It was a complete capitulation with most of the indices in red

The number of advancing to declining stocks was extremely low with hardly any stocks in green. BSE Smallcap and MidCap lost as much as 5% in a single day

All these events suggest that the downfall shall continue further. A steep rally back on 10th might convince many that the bottom is in place again but a close look at 15 mins chart reveal that we might have corrected up in only 3 waves till now as seen on intraday charts.

After analyzing Nifty on 15 mins chart we can very clearly see 5 waves down and 3 waves up till now. This just shows how amazing Elliott patterns work even on time scale of as small as 15 mins.

Nifty bounced back on December 10th and retraced exactly 38.2% at 5850. The bounce back looks almost complete with just one smaller move up pending but we should wait for price confirmation. A move below 5800 - 5780 will provide first confirmation that the down move has started again on short term basis. For medium term, wait for 5720 to be taken out for strong confirmation of negative trend.

Any move above 5950 that marks 61.8% retracement level will increase the odds that the downward trend is in danger. As long as 5950 is not taken out on upside we are bearish. There are couple of other probable scenarios to count the current wave patterns that are bullish but the chances of those working out is less. We will adopt the alternate wave counts once 5950 – 5970 levels are broken on upside. Next support zone is now at 5550 level after 5720 is broken on Nifty.