Nifty: Neo wave analysis - Is it Diametric pattern?

Understanding Nifty short term pattern applying Advanced Elliott wave – Neo wave theory to forecast the next trend. Pattern recognition becomes extremely important for successful trading.

Indian Equity Market has started the year of 2017 on a positive note. From the low made in the last week of December 2016 at 7890 level, prices have moved higher towards 8210 level till now. In the previous article on Nifty published on 30^th December 2016 we clearly mentioned that Nifty should continue to move higher despite all the pessimism and bearishness. We believe that Elliott wave patterns help to capture important reversal areas irrespective of the events that only produces short term random moves.

We are closely keeping on tab on Nifty’s price structure along with time taken by each segment to know the pattern under formation. This helps us in forming different strategies so as to leverage from ongoing pattern.

For option traders it is most important to know that whether current trend is going to be sharp or will it take more time to move higher?. Below is the part of research taken from “The Financial Waves Short Term Update” of 2^nd January 2017 which indicates that there is high probability of Nifty forming Diametric pattern which is 7 legged pattern defined under Neo wave.

Nifty 60 mins chart:

(Part of research published in the morning of 2^nd January 2017)

Wave analysis:

Nifty continued to move higher on last day of the year and touched intraday high of 8197 levels. There was a minor Gap up opening which was sustained throughout the day. As mentioned in earlier updates the short term trend for index is positive as long as we do not see break of support levels. The steepness of the rise can also be attributed to short squeeze as majority of traders and analyst were bearish when Nifty formed double bottom two days back.

Nifty is closing the year with a mere gain of 240 points which also came in last 3 days of the year. This only highlights the fact that how detrimental Time correction can be even when prices were all over the places during this period. The swing high in 2016 was 8969 and the swing low was at 6825 levels. So Nifty covered a whole 2144 points but only to close with minor change year on year basis!

First quarter of 2017 can be highly volatile and January can see huge swings in either direction. The reason being Time cycle of 54 days as well as 108 days are both in sell mode and prices are in a hurry to complete this up move. We are now 34 days old in the 54 day cycle and selling pressure will intensify post ………..

Now looking at the short term chart, as wave b did not consume much time there is high possibility that we are seeing a Diametric pattern on upside which will be 7 legged correction and prices are now in wave c of a-b-c-d-e-f-g structure.

In a nutshell, 2017 will start on a positive note but eventually the rally might fizzle out and selling pressure can start building. But for now over short term trend remains positive with ……as important support and ….. as the next level to watch for on upside.

Nifty has been moving in lines with our expectations and Neo wave is helping us to forecast the trend. Subscribe now to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks with in-depth research. For more information visit Pricing Page

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