Nifty took a "V" turn...

Nifty Daily

Nifty 10 mins chart:

Nifty 10 mins chart shows that we have moved down in the form of a-b-c correction and not 5 waves impulse. As we know wave C should be 5 waves move and since current down leg from 5099 to low of 4540 cannot be counted as 5 down we think this was only wave b of higher degree wave b as shown on daily chart. We have now started wave c on upside of this b wave.

Also yesterday’s rally was steep enough and retraced the previous c leg faster thereby indicating that current uptrend can give us bigger pull back on upside than anyone is actually expecting. Also we can see a break above the downward sloping red channel as shown on the 10 mins chart. Also in this current down leg we did not see Nifty moving down by more than 120 points from previous day’s close but a rally of 150 points in single day yesterday make our positive bias over shorter term stronger.

Sentiments have been bearish across and even most commonly read newspapers have started giving downward projections for Indian markets. This for us is bullish when combined along with other technical indicators.

In short, the bias is now positive over near term as long as yesterday’s opening gap between 4600 – 4550 is unfilled. A move above 4800 will provide further positive confirmation that we have started a move up till 4950 – 5000 levels. However, a follow-up rally will provide more vital information if we are indeed in for bigger rally or the entire up move from 4540 was just corrective 3 wave structure.