10 Jul 2021 ● 03:45 PM
Nifty IT index is at a crucial juncture as the wave counts suggest that a five-rise is complete post the triangle breakout. Now it can be debated that on the weekly chart, Wave v is still pending but given that the daily momentum indicator has nearly completed a pullback cycle, more importance should be given to the daily timeframe and a better wave count would be to mark it as completion of five-wave rise. So as long as the 40DEMA holds, the possibility of extensions within Wave 5 cannot be ruled out. However, if the Nifty IT index closes below the 40DEMA at 27976 then that would mark the completion of Wave 5 and the Nifty IT index can retrace back to the low of Wave 4 of 25462.
The index is interestingly poised ahead of the earnings season, and we should keep both options open with a positive bias given the expectations that the sector will grow against all odds due to the recovery in global markets. In other words, the odds of wave 5 extending from the support near 27976 are higher.