Nifty Elliott Wave Update
21 Mar 2021 ● 05:51 AM
MARKET UPDATE: 21 MAR 2021
|Down then Up|
Explanatory Note: Key support levels being put to test.
Nifty started a correction that has now completed the minimum requirements of a near 61.8% retracement, 5 weeks in duration, and an a-b-c construction on the weekly chart. Based on last week's wave markings of 1-2-1-2 this is the bottom and we should go back to new highs. During the week I started to discuss the original wave count I was following prior to that which shows 5 waves as complete inside a rising channel from the May 2020 bottom. If this is true then this rising channel near 14200 should break and the 20 week average near 14010 [that may rise to 14150 or higher next week], should also break on a closing basis. Such a break lower would confirm the case that 5 waves up are over and we are in a prolonged corrective phase for the months ahead. If we manage to protect the support range near 14300-14200 then we can keep open the idea that the market will keep extending to new highs. Another way to look at it is that wave a, of the correction was 2 weeks so wave c will be 2 weeks that is one more week and we test the 20 week average near 14200 this week and bottom out there. So let's see. [13995 in the table above is 78.6% retracement]. Nifty has also left behind an unfilled gap till 14336, that the market may come down to fill.
Bank nifty could go lower to 32024 near the 20-week average, and below that the wave 4 low of 29687 would be expected. On bank nifty also it is worth considering whether wave 5 ended as shown on this chart. A break below the 20 week average on a closing basis could be a signal of such an event.