Elliott wave or Neo wave act as GPS of the market. It is advanced Technical analysis study that can help traders understand if the trend is matured and about to reverse to catch important tops or lows.
We are showing hourly chart of Nifty that gives the possible path from here on.
Nifty 60 minutes chart:
Elliott wave analysis – As shown in above chart we can clearly make out that prices are moving in the form of corrective pattern and currently is in wave c. The entire structure looks expanding and we can see it failing to sustain above the upper trendline.
From Neo wave perspective, the internal structure of wave (c) seems to be double corrective. Post wave x the ongoing pattern is Extracting Triangle and currently wave d looks to be in progress. Ideally this wave d should break below the low of wave b near 17990 levels and then one pullback on upside is possible.
However, do note this is only an assumption as the pattern can also turn out to be a Diametric on upside. So one should know when to change the stand from bearish to bullish. On upside 18340 is now major hurdle which is also the Gap area. Move above this level will indicate wave d is over and ongoing pattern will then turn out to be Diametric with more bullish possibility. This will remain alternate scenario.
Thus by understanding the ongoing pattern it is possible to trade with probability in favour and one can derive prudent stoploss for positions. Neo wave is amazing tool for forecasting future and one can trade Options or Stocks extremely well once this technique is understood.
In a nutshell, Nifty short term view is bearish and there is possibility that we might start moving lower towards 17840 – 17800 levels. This is valid as long as 18340 remains intact on upside.
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