Time cycles of 54 days combined with Elliott wave and Channels

Nifty managed to sustain the Gap up opening and moved towards the important level of 8900. Further break of 8910 will keep short term trend positive.

Below research is originally published in morning of 23rd September 2016 in "The Financial Waves short term update" For more detailed research visit www.wavesstrategy.com

Nifty daily chart:

Nifty 60 mins chart

Wave analysis:

In previous update we mentioned that “Nifty has continued to move within the Bollinger Bands and it will be only on break above 8820 - 8830 we can expect short term positivity towards 8900 or higher levels with 8688 as very important support.”

Nifty had a Big Gap up opening near 8780 levels post the rally in Global markets on back of FED keeping rates unchanged. Prices stayed within a narrow range after the initial thrust with mixed performance seen within the sectors. The high made on the opening was not taken out on intraday but as the Gap is unfilled this will keep bias positive.

Over medium term perspective, wave g of 3^rd corrective pattern is ongoing. The trendline of the expanding pattern shown few months back is still valid and the high made at 8968 was exactly on this line post which we saw the reversal. As this line is moving higher the resistance will keep shifting and breakout above 8900 will open up possibilities of crossing the psychological 9000 mark.

We are showing 54 days Time cycles again as prices have entered into important zone of 30 days post the previous cycle low. Earlier during the topping zone of this cycle prices moved sideways instead of down. From the lows of 6825 this cycle has managed to capture important lows and momentum reduced post cycle crossing 34 days. Currently we are in 31^st day from previous lows and it is important to see if momentum from here starts reducing.

As shown on hourly chart, prices are now contained within the red channel. There was a breakout above the channel with a Gap on 6^th September and faster reversal back within it again with a Gap. This indicates that the red channel might still be working and the resistance of the same is now near 8900 levels. Also move above 8910 will make the ongoing wave e bigger than that of wave c which will suggest that complex corrective formation is ongoing and invalidate the current assumption of Extracting Triangle. 

In short, move above 8900 – 8910 will resume the short term uptrend towards 9000 mark. Bias will be positive as long as yesterday’s Gap area followed by 8750 is protected.

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