14 August 2011

Nifty : Crystal Gazing

I am a great believer of market cycles, symmetry and fractals. I always try to look for them whenever I look at a chart. Lately the price action of Nifty has shown something to keep me interested.

Look at the chart above, and as I have marked check the fall from (I am being rough here) 6350 to 5700 and then from 6200 to 5200 a roughly 162% expansion in twice the time. This calls for the perfect A vs C symmetry in terms of Elliot Wave Theory.

Now comes the difficult and debatable assumption, which is if the fall from 6350 to 5200 which ended in February is an ABC correction, the fall from 5900 is also an ABC correction, a typical zig-zag correction. Of which we are in wave C and hence should expect some kind of 5 wave formation (from 5700 top).
If we again assume wave A and C symmetry, I expect wave C to be 24 weeks in duration, 6 of which have already passed and length to be 162% expansion of wave A, which gives us a nice target of 4500.

So if Nifty which is already a tad above 5050 have to take another 18 weeks to go down a mere 550 points, what should happen?


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