When markets rise too fast , it does not bode too well for the bull market and normally correction must come sooner than later. In simple terms , the bulls expend their ammunition(resources ) and the upside movement loses power.
Above phenomenon can be seen as a divergence in momentum indicators like RSI.
Presently Nifty is showing divergence . Although this should not be taken as the exact point or time of a correction. However it does give an early warning of a POSSIBLE correction. Together with the fact that the markets are at the upper end of the channel( This channel is drawn using the upper and lower prices on the candle stick charts.
Corrections are always healthy and bring a balance to the on going bull run.
However the fact remains that the markets have come up a long way from the bottom last year. At these levels , every correction must be seen and evaluated closely. There are always levels which one one can decide before hand , which if they break, the markets would be breaking the elliot wave bullish count.
So in the present scenario, we are still in the bull run but must watch the correction carefully as it unfolds. Our aim is not to catch the top EXACTLY and neither to have false alarms.