After giving a 1000 points rally this sudden 350 points drop on Nifty may not be a shocker. But its just that Too many Bulls killed the Rally. And those who were feeling left out and entered late in this Rally above 5250-5300 are the ones now selling below 5300 and adding some short pressure.. :)
But the Question here is Whether that Rally was a New Bull or just a Relief Rally or This Correction a Normal 1. The simple answer to this comes from the below quote-
"The Market can remain irrational longer than you can remain solvent."
Well after 1000 point rally a 350 point correction is normal. But the way it has come in is surely not normal. Though this internal structure looks to be 3 waves this doesn't look like a corrective wave but an Impulse. Which is the main reason to doubt this Rally to be Bull Run.
Considering 4530 as Bottom since wave 2 at 4588 was Sharpe this wave 4 shall come as shallow correction and shall be a combination or complex correction and consume 1-2 weeks as I mentioned earlier.
But such a shape fall doesn't look like normal correction in Elliot Terms. But its still too early to arrive at 1 definite conclusion.
So its still early to say that Nifty bottomed at 4530. But its now bit early to say that it will form New Low.
As of now 5215 shall act as a strong Support and Nifty may start inching upward again.
Well but if 5175 is taken out in this fall then it will be an Initial confirmation for 4760 or worst case 4250. But more confirmation will come after the next rally.
So let Nifty 1st take pause and start inching back upwards and then we shall make any conclusion.
So though currently I've marked 4530 as Bottom I will again like to go with my earlier count of Flat Corrective wherein Nifty can head back to 4760 in case of Running Flat or 4225 in case of Expanded Flat.
|NIFTY EXPANDED FLAT|
So I might again go back to my chart with old labels indicating 4530 as A and now 5630 as B of Flat and then Final C to head to 4760 or 4225.. If and Only If Nifty breaks below 5175. Till then I'm neutral on Market. Not a Mega Bull like others but not yet the Mega Bear like I was earlier.
Well I know some people may criticize me for my Bearish view but I cannot completely deny such Bearish possibilities yet.
I know where I was wrong in the past. At 5060 and 5285 I made mistake of predicting the End of Wave Extension before confirmation. And some people criticized me for my Bearish views. Well I know I was wrong at that time and I accepted it and moved with the Market. But those who criticized me for my bearish view also Forgot that I was the one to call for 500 point Rally at 4550.
I know I lost some 150-200 points on Nifty because of My Bearish views. So currently I'm not aiming for big targets. And slowly trying to trade with small target of 200-300 points.. So I'm happy to see my both targets of 5340 and 5280 achieved in just 1 day. And now waiting for last target of 5220.
So here 1 would square off all the shorts near 5215.. And wait for long confirmation if any.
Thanks & Regards,