Having understood NIFTY in larger degrees, now lets explore it in lower dimensions too!
Continuing from the post, NIFTY JAN Update - Elliott wave analysis
UNDERSTANDING INTERNAL COMPONENTS OF NIFTY
The following analysis is carried out only on the basis of the high probability triangular labeling.
The Analysis is carried out in the primary degree (in daily charts) & it clearly shows that within the developing C wave of a triangle, the triple three combinations are the sub-structures in the primary degree (circled ones).
Here, the first X is a correction to wave W and retraced to 50% of W and it is simple. lets have that first x as x1 for simplifying the analysis.
After the completion of retracement we can expect NIFTY to be bearish for the given target of C wave (at .618 A) levels, which we have discussed in previous post, NIFTY JAN Update - Elliott wave analysis.
The chart above clearly states that there are 'n' number of resistances in the circled area, which NIFTY would approach in 2-3 days / within this week. lets denote & pen down the resistances over there.
38.2% R is resisting NIFTY currently.
50% is will be a strong resistance.
the Cluster of EMA's over there coinciding with the 50% R levels.
and Finally, the very short-term trend line.
Based on all these factors, we can expect NIFTY to be withheld at these levels and then will get reversed to complete C wave at one larger degree.
For further clarification, visit the video
Since, we have understood all the influential factors in the asset, it might not be wrong to deal with the trading setups now,
FOR POSITIONAL TRADERS,
The sentiment is in a consolidation scenario (H.P Triangle, for an alternate combination, watch for the 7500 & 7160 levels closely).
FOR SWING TRADERS
The sentiment is strongly bearish till the levels - 7500 but watch out for the proper entry!
FOR DAY TRADERS
Watch for all retracement ratios for X2, analyse the internal substructures within X2 & understand the bearishness to act accordingly, taking a long at this instant might not be a better trade with respect to Risk : Reward. (as reward is purely questionable!).
If a trader can catch the entry at 50% R levels of X2. then,
The ultimate risk for short-term traders/SL would be the high of wave Y/end of X1.
The reward will be .618 A / .786 A for completion of triangle wave C.
Basically, for an entry @ 8312, SL @ 8735 & TP @ ~7500 levels
The Risk : Reward would be 453:812 which is approximately 1:2.
This would be safe for a trader (but in reality, the risk is way smaller than what it is supposed to be, the SL is projected to be really safe). The high of wave X1 is unlikely to be taken off!
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