Please find the analysis of Nifty in the images below!
Nifty 50 formed a Dojipattern right at the 50% Fibonacci retracement level today. Could this be the end of Wave B?
Note: Wave Bcatches people in the wrong direction. It performs the task of enticing the suckers to jump into the market. This is where bear or bull traps happen. As a general rule, B Waves tend to show lower volume.
Analysis: I believe Nifty 50 is showing the same traits of “eager participants jumping in at small rallies”. A failure to close above 10900 will ensure correction and beginning of Wave C. However, even if it does, the 61.8% golden ratio resistance level stands waiting at 11,100 which is a very strong resistance level and crossing that probably call for a new high in the index, which given the market climate seems far-fetched.
Chart 1: Nifty (Daily) as on 30th Nov, 2018
There is eerie precision in today’s closing price which exactly coincides with the 50% retracement of Wave A
The above is a 30-mins chart. Today’s price movement shows uncertainty among the participants. Though the index opened strong, it continued to fell throughout the day and only closed slightly position thereby forming the doji we saw above. The RSI had dipped below the level of 60 today for a while. As many may point out, it indeed is a bit pre-mature to conclusively point out that the rally is over for once but considering that oil prices are expected to bounce back owing to the cut in oil production, I think it is fair to look for evidences of weakness in the index too.
Chart 2: Nifty (30-mins) as on 30th Nov, 2018
If Nifty 50 turns lower from this level, or even from 11100 which is the 61.8% retracement of the initial fall, more pain could follow in the unfolding of Wave C
Chart 3: Nifty (Daily) as on 30th Nov, 2018
That\’s all for the day! Stay tuned to my blog for more research on stocks, indices and commodities as and when I spot an opportunity worth writing about!
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