TIME TO BE CAUTIOUS

Hi Friends,

In our last update we projected this move towards 5650. So far Nifty has been moving nicely in a Up Trend Channel. We almost captured a nice 300+ points move from 5040 levels. Now its time to be little cautious.

One thing is now confirmed that we are actually in 'B' leg up of the larger Zigzag Corrective in major "C" which started in Nov. 2010. Of which 'A' leg was a Leading Diagonal or Complex Corrective. By Elliott Wave logic 'B' can either be Zigzag, Flat, Triangle or Combination. Looking at the current structure possibility of Flat is ruled out.

So there are now tow alternatives coming up:-

NIFTY - ZIGZAG

1. As per our preferred Count Nifty is in C leg of 'B' leg up which is developing as Zigzag. Though we were initially thinking C to develop as an Impulse the internal structure is not clearly Impulsive within 1st leg up. So C might be developing as an Ending Diagonal. Where all 5 legs are 3 legged structure. So it would be Aproriate to take June-July Rally as A leg & the move towards 5032 as B leg of the Diagonal. Currently Nifty is in C leg which could reach up to 5610 or higher. But for this we need confirmation above 5378 and then above 5481..

NIFTY - TRIANGLE

2. As per the next best alternative 'B' leg might be developing as a Triangle where all 5 legs are 3 legged structure. As per this alternative Nifty is in D leg of the Triangle which is developing as an Expanded Flat. A move below 5286 & further below 5261 can take Nifty to 5060 or lower to 4980 in D leg of the Triangle. Since the move in last 2 days is not clear Impulse Nifty can retest 5378 area before sliding down.

We are still going with our preferred Count and aiming for 5600+ for 3rd leg of the C of B in Zigzag. But we are cautious and all longs are to be kept with stop loss of 5280-5290.. We would go short below 5280 & add  more below 5260..


So lets wait & watch..

Thanks & Regards,

Harsh Dixit.