Understanding the trend of Nifty with the application of Elliott wave, Bollinger Bands®, trendlines, RSI!

In last few days Indian Equity Market has witnessed high volatility in which sharp downfall from 10140 to 9685 and then sharp rise towards 9948 level. Then again there is retest of prior low. This kind of movement is enough for traders to stop guessing the market. That is why use of objective technical tools is must in this kind of market to capture the next trend.

In the past occasions many times we have seen formation of h shaped pattern which is not given in any technical analysis book but it is founded by us many years back. In this pattern, prices retest the earlier lows which look like alphabet h and that is why we have given the above name to the pattern. Below is the past of research taken from The Financial Waves Short Term Update.

Nifty daily chart:

Stocks: Nifty: Is it forming “h shaped pattern”?

(Part of research taken from Equity report dated 21st August 2017)

Wave analysis:

In Fridays trading session Nifty had Gap down opening at 9865 level and throughout the day selling pressure was witnessed towards 9780 level. By end of the day some pullback was witnessed which lead to closing Nifty closing near 9835 level. IT was the top most losing sector which lost more than 2%. Infosys closed down with loss of more than 9% on back of Mr. Sikkas resignation.

On a weekly basis Nifty has made small bullish candlestick pattern after the bearish candlestick formed in last week. In current week prices have protected the prior weeks low of 9685 level, so as long as prices remain above this level weekly bias will remain sideways to positive.

As shown in daily chart, the sharp down move witnessed in last week has open up many possibilities. We expected the start of wave c of Triangle pattern however recent down move is suggesting that wave b might be still ongoing. In the past we have observed that h shaped pattern worked very well. So there are chances that prices retest the earlier low near 9685 level and post the same it can reverse on upside. Nevertheless as of now it is important to wait for development of pattern along with break of crucial support and resistance levels. 9685 and 9948 level is the broader range.

(60 mins chart is not shown here which is in original report)

As shown in 60 mins chart, prices have taken U turn from 9948 level however yet there is no such confirmation for start of next trend. Such kind of sharp rise followed by sharp fall can result into sideways action. Bollinger Bands works well during the consolidation. As of now prices are near to the lower band ..

Nifty once again has arrived at the crucial juncture from where next sharp trend can emerge. To know the important reversal areas and Elliott wave pattern, get access to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.