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NIFTY JAN Update - Elliott wave analysis

Continued from the Post will nifty sustain 8000 levels?

This part is the third phase of the analysis and this will reveal the High probability move in future & describes short term direction too!

The reason behind this analysis has been supported by various factors,

THE NEED FOR TRIANGLE ?

Triangle is formed as a result of consolidation psychology

The supportive factors,

  • Wave (2) is so simple that it lasted just more than a year. This leaves the wave (4) to be complex & triangular formation @ wave 4 position is favored, irrespective of the asset.

  • Wave (4) can retrace to decent amounts - say here it is 50 & the target is reached but anything more than 50% R is way too more for a retracement following wave (3). Therefore, this retracement would be revolving within the limits of 50% R - this eliminates the combination/ double three scenario & leaves us with only option - TRIANGLE.

  • Moreover, the Geo-political, DE-monetization concerns doesn't support either direction & this leaves the markets clueless & hence the consolidation is the only thing that keeps the markets spinning but without moving anywhere distant.

LET's ANALYSE THIS TRIANGLE

Having to decide this as a triangle takes a bit of experience & risk, but definitely the risk is comparatively less than other scenarios & well compensated too!

  • Wave A took out 50% R levels!

  • Wave B is a retracement to wave A but not related to any guideline & definitely finished less than wave A - this confirms a triangular structure.

  • Wave C is currently unfolding & is expected to be .618/.786 times wave A.

[we will follow up the move & publish the levels for wave D & E, as market progress]

LEVELS TO WATCH!

Wave C is definitely not completed!

Take a look at the c's profile - how it has reacted to wave A's retracement ratios

The Pre-50% is supported by the static support zone on left.

we can expect wave C to be firmly supported by either .618/.786 levels

Please refer to the video for further clarification, if there exists any confusion/misunderstanding, do use the comment section (below).

STOP LOSS LEVELS

Entering a trade at this instant will entitle high risk, to understand how to mitigate the risk? read below,

  • The risk here is maximum, because the SL will be @ 8963 / C's top - this level is for long-term traders / positional traders.

  • For swing trading setup - the SL could be 8737.

Having understood the direction in various scenarios,

The short-term direction is clear, downwards; Either for completion of C of a triangle/wave Y of a combination / wave 2 of new cycle degree (low probable).

Is it wise to take a sell position on NIFTY @ this area?

There are things to be considered before answering this question, the daily time frame has not been analysed yet,

  • In OUR post NIFTY JAN UPDATE-DAILY ANALYSIS, we have analysed daily time frames in detail - this provides a good price for entry & mitigates your risk!

  • Moreover, a double confirmation is pre-requisite before a prefect trade! which is linked given in our forum post, here.

 

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PLEASE NOTE:

  • Great News - We will follow up this analysis in weekly time frame & publish any updates in forum.

  • The analysis will be exclusive to brains' newsletter subscribers & will be posted elsewhere only after 2/3 days. Please ensure that you sign up for forum & newsletter!

Thank you for reading this article.

Regards,

LeadBrains

Happy Trading

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