NIFTY – Correction is overdue by conventional indicators as overbought on both a daily and hourly basis. Elliot’s count can extend on the 3rd wave but shows signs of weakness. On Monday we may or may not try for a higher swing. Most likely we should correct it.
It’s important to note that oversold and overbought conditions are subjective and can vary depending on the time frame and the specific security or market being analyzed. Markets can remain overbaught for long periods of time and therefore should never be seen in isolation. On Elliot wave count perspective, wave 3 can extend (and is extending) it can be 1.681 OR 2.618 times of wave 1 (Fibbonacci levels). Presently it is just reaching 2.618 times of wave 1.
NIFTY – FIBBONACCI LEVELS
In Elliott Wave analysis, Fibonacci retracement levels are commonly used to identify potential levels of price retracement during corrective waves within the larger Elliott Wave pattern. The most commonly used Fibonacci retracement levels are 38.2%, 50%, and 61.8%. These levels are derived from the Fibonacci sequence. I have personally found them to be very helpful in formulating a correct count.