Nifty - Elliott Wave Analysis

4 Hourly Chart

Nifty has reached our support zone, and has already showing signs of a possible reversal. Will this up move continue, only time will tell. But if we want to reap the benefit of this possible up move, we must concentrate on some critical levels, first is the 5 DHEMA @  5155, second is the 5 WEMA @ 5172, closing above these levels will mean the momentum will be with the bulls, but the key resistance is around 5260 odd levels, the wave [b] top. If we take out this level, we can become more confident of the up move. And finally the top of wave I @ 5342. Remember we are expecting a wave III, so as we go on breaking above these levels there should be marked increase in the momentum, if we falter at any of these resistances, we should be alert to the possibility of this up move failing, which may result is sharp downside movements. The hourly chart below provides us with another priceless EWP nugget, along with the resistance levels mentioned above, we should also be on the lookout for prices breaking out of the rising blue channel, since corrective waves tend to be contained within parallel lines, if we break out above this chanel, we may see sharp rise in prices, significant of third waves. Getting resisted at the top channel boundary of course will mean the move was corrective, and the main trend is still down.

Hourly Chart