Valid break out last 18 sessions sideways trading range will confirm next trend
Technical Analysis,Research & Weekly Outlook
(Aug 16 to Aug 19,2016)
Nifty-EOD Chart (12-Aug-2016):-
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1- Corrective Wave-A of 'ABC' beginning after life time high formation at 9119.20 on 04-03-2015
2- Wave-A(7940.30 on 12-06-2015)
3- Wave-B(8654.75 on 23-07-2015)
4- Corrective Wave-C completion at 6825.80 on 29-02-2016 and Wave 1 of fresh Rally beginning
5- Wave-1(7583.70 on 14-03-2016)
6- Wave-1 gained 757.90 points
7- Wave-2(7405.20 on 16-03-2016)
8- Wave-3(8288.90 on 08-06-2016)
9- Wave-3 gained 883.70 points
10- Wave-4(7927.10 on 24-06-2016)
11- Wave-5 continuation with recent top formation at 8728.40 on 09-08-2016
12- On Going Wave-5 has gained 801.30 points till now
13- Previous 18 sessions sideways trading between 8518-8728 from 25-07-2016
Previous 18 sessions Intra Day Chart Analysis
Nifty-Intra Day Chart (Jul 25 to Aug 12,2016):-
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1- Previous 18 sessions sideways trading between 8518-8728 from 25-07-2016 to 12-08-2016.
2- Higher levels resistances and lower levels supports within previous 18 sessions trading range.
Conclusions from 18 Sessions intra day chart analysis
Previous 18 sessions sideways trading between 8518-8728 with higher levels resistances and lower levels supports therefore therefore valid break out of this range will decide next trend.
Intra Day Chart Analysis(12-08-2016)
Nifty-Intra Day Chart (12-Aug-2016):-
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1- Selling patterns formation between 8664-8684
2- Consolidation patterns formation between 8632-8650
3- Whole day actual trading between 8605-8684
Conclusions from intra day chart analysis
Although 0.93% Green closing after whole day positive zone trading but selling patterns formations also therefore sustaining above day's highest after fresh consolidation is must for next decisive up moves. As consolidation patterns were also seen after some slipping therefore on going rally continuation hopes are very much alive after follow up consolidation.
Conclusions (After Putting All Studies Together)
Trends of Nifty are as follows:-
1- Long Term Trend is up.
2- Intermediate Term Trend is up.
3- Short Term Trend is sideways for the last 18 sessions between 8518-8728 with following resistances within this range at higher levels:-
1- 8664-8684
2- 8686-8710
3- 8708-8723
As last 18 sessions sideways trading between 8518-8728 with above resistances therefore Waves have been counted differently which is suggesting minimum Intermediate Term correction of whole Post Budget Rally 2016-17 but valid break down of 8518 will be correction beginning confirmation which should also be watched if Nifty fails to sustainin above last 18 sessions highest(8728)
Maximum target of on going Waves structure is at 8810.80 as per following calculations:-
As per Elliott Wave theory "Wave-3 should never be shorter than both Wave-1 and Wave-5. Now Wave-5 is on and it should not gain more points than Wave-3.
Wave-3 gained=883.70 points(8288.90-7405.20)
It means on going Wave-5 will not gain more than 883.70 points which started from 7927.10. Therefore maximum target of on going Wave-5 will be:-
7927.10+883.70=8810.80
Till now on going Wave-5 has gained 801.30(8728.40-7927.10) points but can not gain more than 883.70 points. It means that if on going Wave-5 fails to move above 8810.80 and sustains below 8518 then that will be confirmation of post Budget Rally 2016-17's correction which may be deeper also.
As Post Budget rally has already gained 1902 points in last 6 months and Oscillators have turned overbought on weekly Charts as well as some have started to show negative divergence therefore its correction is very much due now and firstly valid break out of last 18 sessions range(8518-8728) should be watched in next week but Nifty should not move above 8810.80 otherwise Waves will be counted in that manner which has been updated in previously Weekly Analysis topics.
Last 18 sessions sideways market between 8518-8728 and its valid break out will confirm next trend in above mentioned manner which should be firstly watched in next week.