Current Wave Analysis for Nifty 50
Top of Intermediate Wave 3 (September 25, 2024):
Nifty made a significant high, marking the end of Wave 3, a strong impulsive rally fueled by bullish sentiment and favorable global factors.
Wave A Correction (Completed on November 22, 2024):
Wave A typically represents the first leg of a corrective ABC pattern.
This decline was sharp and impulsive, likely triggered by profit booking and external macroeconomic concerns (e.g., geopolitical tensions and rate hikes).
Wave B (Ongoing or Near Completion as of January 4, 2025):
Wave B corrections tend to retrace part of Wave A but remain deceptive, often creating a FALSE SENSE OF MARKET RECOVERY
• The current uptrend since November 2024 is likely Wave B, and its structure seems to be corrective (zigzag or flat).
Upper Bound for Wave B (25,100):
• A resistance near 25,100 is consistent with Fibonacci retracement levels (likely 61.8% of Wave A).
• If Wave B is still ongoing, expect a final push toward this level before reversal.
• If Wave B is complete, Nifty will start Wave C down soon.
Wave 4 (Target Zone: 21,500–22,600):
• Once Wave C begins, it is expected to complete the larger Wave 4 correction.
• This zone aligns with Fibonacci retracement levels of the entire Wave 3 rally.
• Wave 4 corrections often display complex patterns, so volatility is expected.
Wave 5 Bullish Trend (Post Wave 4):
• After Wave 4 completes, a strong impulsive rally in Wave 5 is anticipated, targeting new highs.
• Catalysts for Wave 5 could include:
• Stabilizing global markets.
• Easing interest rates.
• Favorable domestic policies.
CONCLUSION
The Nifty is in a complex corrective phase, and clarity on whether Wave B has completed will emerge based on price action in the next few sessions. Regardless, the larger Elliott Wave structure suggests a bullish Wave 5 rally will follow the completion of the ongoing Wave 4 correction.