NIFTY Elliot Wave Pattern : Grand Major Wave III Completion | Starting of Wave IV
Nifty has completed its Major Wave III near 10300 level as expected in previous post. Nifty is near the top of 10300 - 10400 resistance level and as per the wave count 10300 Spot nifty is the level of trend reversal.
Daily chart also shows the pattern of trend reversal, after sharp gap up opening Nifty failed to cover the gap and low of the day was seen at 10242 support. Previous days high was seen at 10238 which shows today was a run away gap though the prices closed below the day open.
Suppose if Nifty 50 spot Thursday 26th Oct opening is seen well below 10235 and fails to cross the same throughout the day giving a negative closing this week. This will form a strong island pattern reversal on the daily chart indicating trend reversal.
On the daily chart today's candlestick pattern is a Hanging Man formation. Nifty opening was strongly positive near the days high at 10323 having small upper shadow testing high of 10326.
Failing to sustain at higher level prices dropped there after and traded lower testing the level of 10242, where as closing was seen at 10295 just below 10300 level.
As per the Elliot Wave well explained in the above chart; Grand Wave III is over and will look at the start of the Wave IV which will be a steep and corrective wave. Presently all the news in market seems ultra bullish where many of the mid cap stocks have rallied by more then 30 % to 50% in just couple of week, and todays sharp rise in baking stocks have been a surprising factor.
As per my reading monthly closing of Nifty spot will be well below 9900 level just near the months low. If this happens this might also be a good indication of the trend reversal, where the candle pattern will be Shooting Star.
Rajeev Darji
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