Nifty Elliott Wave Update

MARKET UPDATE: 28 SEP 2020

NIFTY
TIME	TREND	UP LEVEL	DOWN LEVEL
Medium term trend	Up	11400-11618	10833-10690

Explanatory Note: Wave 4 done wave 5 started

It was a big down week for Nifty, the good news is that we closed above the 20/40 week moving average despite the decline, at 10833 and 10690. The weekly momentum indicator remains in sell mode, and when that happens the trend can remain bullish only if the averages do not break. So I continue to anticipate wave 5 up as long as we are above the averages. Along with that prices remain inside a rising channel from 1 to 4. Wave 5 up should take us back to the top end of the channel near 12600.

 

The bank nifty weekly chart shows the sell signal on momentum followed by a break of the 20-week average. This combination is usually a signal of a trend reversal however it is not confirmed by Nifty or Midcap indices. The wave count for wave 2 can be an expanded flat though I do not like the idea that wave b has gone further than 161.8% of wave a. So the only reason for this possibility is the proof that wave b is 3 waves up. It is a corrective move and therefore cannot be marked as an impulse. The last level to keep this hope for a bottom in bank nifty is the 61.8% retracement mark at 20260. After that, I would have to open it up for bank nifty to crash to 18400.