Elliott wave, Channeling, RSI applied on Nifty

Bottom Line: Nifty uptrend has failed to last for more than 3 to 5 days. The momentum dries out near new highs. Channels providing clear layout.

Nifty daily line chart:

Wave Analysis:

Over past week Nifty has corrected from the highs of 6415 post election result announcement. The up move lasted only for 3 days and then the correction started after making life time highs.Everytime prices reach near new highs the momentum dries out and overall breadth starts to deteriorate. Even this time making new highs have failed to generate strong momentum, indicating that the correction since 2008 is still not complete.

On daily chart, we have shown an upward sloping channel valid since January 2012 onwards. As long as prices do not break above the upper trendline of this channel we can expect subdued action near the upper range. The current ongoing leg is moving in upward sloping red channel which should provide supporting activity near …….. The low made on Friday was close to 6160 levels and the down move has completed 4 days. For more than a year we have observed that the down move normally lasts from …………. days whereas the up move lasts ……. days.

The daily chart also shows the path of ongoing correction since 2008 onwards. Currently, wave ……

Over short term, 60 mins chart is clearly showing an oversold state with RSI reading near 25 levels. Minor consolidation can be expected to relieve this oversold state.

In short, levels to watch will be ???!

The above research and detailed analysis on Nifty is published in today’s morning equity research report ‘The Financial Waves Short term update”. To know detailed analysis and path ahead subscribe now by simply visiting http://wavesstrategy.com/index.php/store.html