Nifty IT

In the previous article, we mentioned the possibility of extension up to 35300 which was 161.8% of wave I. In yesterday's trading session, Nifty IT registered a high of 35581 and closed lower thereafter. The daily momentum indicator was still in sell mode despite the new high and it looks the Nifty IT is losing momentum on the upside. The wave structure suggests that wave III is possibly complete and now wave IV correction can now play out. This will be further confirmed if the Nifty IT index closes negative for the week. The Nifty IT index can possibly consolidate/correct in the next few trading sessions till the time the daily momentum indicator doesn't complete the pullback cycle. On the way down, the 20DMA and the 40DEMA are currently pegged at 33850 and 32424 respectively. These key moving averages are the immediate support levels to watch out for in the near term.