Let’s analyze nifty which has shown very good uptrend recently from the low of 11090.65. To
understand it clearly let’s see 1 hr chart of it first.
From the above chart we can see that wave 1, 2, 3 and 4 has been completed at 11832.5 and now wave 5 is under progress. Wave 5 has achieved it’s normal 38% target by making high above 12240 and next target at 50% level is at 12365 which may come or may not.
Let’s understand the development from the low of 11832.5 in 15 min chart of Nifty.
In this chart we can see that wave 1, 2, 3 and 4 is completed. Now thing to note is wave 3 is not extended so wave need to be extended beyond 61% of 0-3 distance. So we can project how far wave can go. For that let’s put a projection for wave 5 in the same chart.
Here we can see that wave 5 needs to be get extended beyond 61% of the distance of 0-3 which come at 12232 and Nifty has made high of 12293.25 on 20th December. So wave 5 of wave 5 has been extended after crossing 12232. 100% projection of wave 5 is coming at 12348. Crossing 12348 is very rare. Also note that most of the conditions required for wave formation is fulfilled at this point. For more clarity and understanding of current development of Nifty let’s analyze it from the low of 12046.65 in 5 min chart.
In this chart we can see wave 1, 2, 3 and 4 is completed. Now normally wave achieves 38% of 0-3 distance. Here 38% level is 12308 and 50% level is coming at 12337. Also one high is looks pending above 12292. We can expect Nifty to reach very close to 12308 at least. 100% level of one degree higher is coming at 12348 and 50% of this degree is at 12337. This becomes very strong resistance for Nifty.
As of now Nifty is ready to give a big fall as multiple degrees are getting completed near 12308. Very strong resistance is in the range of 12340-50. But selling is only advisable after witnessing a quick fall first which will confirm that trend has changed. As of now there is no sign of reversal. Risky traders may take a sell trade near 12308 zone keeping SL above 12375( some points above 100%). No buying is advised as of now as all the conditions of wave formation is getting completed.
Disclaimer:- Idea and views given here are only for educational purpose. It is just to show how Elliott wave analysis can be done in practical example. Do not take any trade only on the basis of idea given here. Consult your financial advisor first before taking any trade. We do not take any responsibility for any trade taken by whatsoever means or purpose.