In my last Nifty analysis, I mentioned that wave 5 on a smaller scale is showing signs of extending. I had also shown the extent to which it can rise. This is now almost being achieved.
For trading, one must look at the larger picture. Currently, the final wave 5 is near completion as shown in the 1st chart above. It is nearing the target of 18000 plus.
This whole move from the bottom (in 1st chart) completing 5 waves (in red) will constitute the 1st LARGER wave, which when completed will correct into wave 2.
ABOUT WAVE 5 (IN ANY DEGREE) – Nifty
Wave 5 being the last wave of the trend, represents the final push in the direction of the dominant trend. It may or may not extend and at times CAN FINISH ABRUPTLY TOO. Although it is usually accompanied by high trading volumes but loses momentum ultimately which may be indicated by divergence in technical indicators.
Whenever wave 5 extends, it is my personal experience that the markets though may give a sudden correction, it does not normally give way and will test the top at least one or two times(making a triangle of some sort.)