Applying RSI on Nifty along with Elliott waves

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Applying RSI on daily Nifty chart. RSI has been moving very well between 30 and 70 levels since 2013 start!

Nifty Daily chart

As seen from daily chart, RSI has again reached near 30 levels. Since start of 2013 RSI has been acting as very good supporting indicator. In a range bound movement the accuracy of momentum indicators increases. We have been able to perfectly capture the top in January 2013 when there was almost 5 negative divergences and it was quoting at 70. Then again in February and April RSI touched 30 and prices bounced back on upside. Again in May the top was made when RSI touched 70 with negative divergences and touched 30 in June. All this indicates that the market is in sideways direction and oscillator moving between 30 and 70 levels. Currently we do not have positive divergence on daily scale but RSI is at 30. This means there can be a minor bounce back on Nifty and prices should again come down near previous levels which will form positive divergence with RSI before starting the retracement of the complete down move from 6093 to 5487.

The internal wave counts of current fall continue to be little tricky. However in our daily research report we have shown one of the probable wave counts along with key levels to be watched. For more information visit www.wavesstrategy.com