According to established guidelines:
1) Wave 5 typically projects to 61.8% of the distance covered by Waves 1 to 3.
2) The minimum extension is set at 38.2% of Waves 1 to 3.
3) In instances of extensions in the fifth wave, projections can reach as high as 100%.
Upon analyzing the Nifty index using these criteria, we observe that the primary wave has extended, with a projection of 100% estimated at approximately 26,339. The next degree wave, comprising (1), (2), (3), (4), and (5), has a standard projection of around 26,385. Meanwhile, the lowest degree wave, represented as 1-2-3-4-5, has a typical projection of 61.8% at about 26,252. By integrating these figures, we identify a potential zone between 26,252 and 26,339 that may signify the conclusion of Wave 5.
Examining the indicators for additional insights, we note that the monthly RSI is around 82, marking the highest level since the 2008 financial crisis.
Considering all the aforementioned factors, it is plausible to suggest that the Nifty index may experience a reversal within this identified zone. However, it is essential to remain aware that we are currently in a bull market, and we should await price action and candlestick patterns for confirmation before making any trading decisions. All wave counts are illustrated on the accompanying chart.
For a detailed explanation on Elliot waves basics, please refer to the following link:investopedia.com/terms/e/elliottwavetheory.asp
DISCLAIMER: It is important to note that the information provided in this analysis is intended solely for educational purposes. It is strongly advised to consult with a financial advisor prior to making any investment decisions. I cannot be held responsible for any financial losses that may occur.
