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Nifty – Technical & Fundamental View

This article was posted on Oct 9, 2018 and is filed under Market News

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High volatility, will the 4th wave be in an expanding triangle pattern?

This is a brief update about a possibility on nifty.

There are few changes in the wave count that I mentioned in last post, will update full wave count later. (read for details >https://nseguide.com/market-news/technical-and-fundamental-research-update-on-nifty)

It looks like 5.5.4 is not complete yet (had a real doubt about this. You could see that in last post, I mentioned a question mark in 5.5.5 formation, plotted on weekly chart). It also gave enough cues from the break of 10900 itself (refer last post).
Such a 4th wave formation can be in two patterns. Running flat or an expanding triangle. In running flat commonly the C segment will be in an impulsive 5 wave pattern, but in this formation, it is forming more of abc pattern . Hence there is more possibility of an expanding triangle pattern ( the waves are still forming, please understand that this is high speculation and variations can occur).
So if, it is in an expanding triangle, It could form two bull traps and two bear traps. One bull trap is done and if nifty goes below 9952 and comes back, that will be bear trap 1 and we could really doubt this pattern formation.

nifty tech

Fundamental view (based on our research): Fair valuation of nifty is still around the same levels mentioned in the last post. Let us check the upper band, which is more important at this point. (We actually follow two levels, one mentioned in last post is the valuation (now at 8000 levels), and this chart is its upper band ( now at 9950 levels) ).  You can find the importance of these levels by looking the past years formation.

nifty fund

Conclusion

So both fundamentally and technically 9950 levels becomes important as of now. Last closing price is 10316, we really need to look for the support formation for further cues. And if 4th wave is forming in an expanding triangle,it could run for 9-12 months. Let us wait and watch.

 

About Author

Written by Dr. Sreejith K B (sreejithkb.blogspot.com). Author has written this post for www.nseguide.com

Disclaimer > Author is not a sebi registered research analyst. This post is to be considered as expression of personal view only. “Technical analyses relating to the demand and supply for a particular sector or index is exempted from the purview of the RA Regulations”

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