Going by Elliot wave theory, NIFTY went through an extended phase during the wave 3 period and after which it is now going through wave 4 correction
Market hasn't shown any direction for the last 14 trading sessions and that is more than 2 weeks now. More likely after observing NIFTY for couple of days I have updated my blog with the following details
Going through Fibonacci extension levels, by connection wave 1 low & high values i.e. 4770.35 & 5438.55, we see that the extended wave 3 is just above 178% of wave 1
We come to a conclusion that wave 3 extended wave made a move of 178% of wave 1 (you can calculate this either through a fibonacci calculator or using any technical tool). I use Chart Nexus which is a free software available on the Internet to perform technical analysis
Going by wave 2 correction which made a 50% correction of wave 1, we can apply the same logic that wave 4 correction will be anywhere between 38.6% to 50% of wave 3. Hence we can comfortably say that around 5550 levels NIFTY should start climbing back and if we add 50% extension to wave 3 then we can say that we may get close to 5920 to 5950 levels and that will complete wave 5 movement
Note : NIFTY is bound to correct after it reaches 5900 to 5950 levels, so do not add any fresh positions in that zone. The correction thereon can take NIFTY to a A,B & C pattern which will make it reach 5000 levels and this is more likely to happen post Nov series
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