Nifty Daily

 

LONG%	SHORT%
92%	8%

Position Sizing model - Long % = percentage of indicators bullish v/s Short % = number of indicators bearish, Including both daily and weekly time frames.

NIFTY
TIME	TREND	Up Level	Down Level
Short term trend	Up	15576	15170

The 2-day decline in nifty has brought the daily momentum indicator back to its trigger line. The wave count suggests that we might still be in minor wave ii and wave iii up did not start as yet. On the hourly chart, it will look like a running flat inside a parallel channel. At the end of the day prices closed just above the lower end of the channel and if the support holds at 15,170 then wave iii up should start from here and take us back to 15,500 or higher. A further decline below 15,170 could weaken the structure sufficiently to push it back to the 20 DMA near 14,715. Since the lower channel line is very close to the 40-hour average and Bollinger band I expect the support to hold as of now.

The hourly chart shows a parallel channel and therefore we cannot call it an ending diagonal as of now. An ending diagonal should either be a contracting pattern or an expanding pattern. If prices hold 15,170 will go back to the top end of the channel near 15,526. If 15,170 breaks then we go back to 14,977.

The swing continues to decline in the pattern is very similar to what we have seen in the October and November and January rally. There are multiple negative divergences before we got a short-term correction and then the readings were quickly oversold. C of the same pattern repeats. 

BANK NIFTY
TIME	TREND	Up Level	Down Level
Short term trend	Up	38800	36557

Bank nifty keeps us open to both alternate counts, that wave iii is extending or that we would initially form wave 1 of 5 and get some pullback. If nifty breaks out of a running flat as discussed above that the odds would be greater that bank nifty is extending in wave iii. In either scenario, we should be headed towards 39,000 first.