close icon

Nifty 50 Aiming For the Top

For the Nifty 50, the Great Recession ended in October 2008, when the index bottomed at 2253. Since then, prices have been rising until March 2015, when 9119 was reached. But the bulls could not keep that momentum, which led to a decline to 6825 by late-February 2016. Currently, it is hovering around 8110, but none of these figures will tell us what to expect from now on. So, the real question is how to interpret them, in order to find clues of the market’s future intentions. To do that, we need to see where do these numbers fit into a price chart and what the Elliott Wave Principle has to say about it then. Elliott Wave analysis gives best results, when we start from the biggest time frame and go down to the smaller ones. The weekly chart of Nifty 50 is given below.
nifty 50 weekly

The weekly chart shows the entire development since the bottom in October 2008. As visible, it cannot be counted as a five-wave impulse, at least not yet. In our opinion, that is because the pattern is still in progress. It looks like waves (1) through (4) have been completed and wave (5) to the upside is currently in progress. Apart from the count, we see three other reasons to be bullish on Nifty 50. First, according to the theory, the first and the fourth waves within an impulsive sequence should not overlap in price. As visible, wave (4) fell to 6825 and then jumped back up, which is higher than the termination point of wave (1) at 6338. Second, the post-9119 weakness, marked as wave (4), seems to have ended precisely at the 50% Fibonacci retracement level of wave (3). And third, impulses tend to develop between the parallel lines of a trend channel. Nifty 50’s trend seems to abide by this guideline, since wave (4) slightly breached the lower line of the channel, but quickly returned back in it. That is about all the information we can extract from the weekly chart of Nifty 50 and it suggests the larger uptrend has resumed and the index is poised for new highs above 9119 in the long term. Now let’s take a look at the sub-structure of wave (4) on a 4-hour chart, to see if wave (4) is really over.
nifty 50 4h

It appears it is. Wave (4) looks like a complete W-X-Y double zig-zag. An (a)-(b)-(c) simple zig-zag in wave W, where wave (a) is a leading diagonal, followed by a smaller (w)-(x)-(y) in wave Y with an intervening wave X in between. Wave y of (y) of Y completes the entire corrective sequence and gives the start of a new rally to 8295 so far. We believe the most recent advance from 6825 to 8295 is the start of wave (5) to the north. In addition to the count, pay attention to the fact that wave (4) has been developing within a corrective channel, whose upper line has just been broken by the bulls. It appears this resistance was successfully turned into support, which further confirms the positive outlook. If this is the correct count, the recovery from 6825 should extend into a larger five-wave impulse in wave (5). In conclusion, Nifty 50’s weekly uptrend seems to have resumed and new all-time highs could be expected in the long term. Nifty 50 bulls seem to be aiming for the top.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Dow Jones Sends a Warning Investors Can’t Ignore

The price movements of financial instruments form repetitive patterns, called Elliott waves. Experienced analysts try to recognize those patterns in order to prepare for the next market move. Sometimes, a pattern can indicate not only one, but the next two consecutive moves. The triangle pattern, for instance, is known to precede the last wave of…

Read More »

DAX 30 Adds to Global Recession Fears

The German DAX 30 index has been declining since early July when it reached 12 656. Last week’s news that the German economy shrank by 0.1% in the second quarter only added to global recession fears. The benchmark index of Europe’s largest economy fell to 11 266 on August 15th. Are investors’ concerns warranted? Or…

Read More »

Dare to Guess the Best Stock Market Index of 2019?

The first half of 2019 saw stock market indices around the globe rebound sharply. In the U.S., NASDAQ, DJIA and the S&P 500 are up 22.7%, 14.8% and 18.9% since the start of the year, respectively. In Europe, the German DAX and France’s CAC 40 both climbed 17.8%, UK’s FTSE 100 surged by 12% and…

Read More »

Is the Dow Jones Transports Signaling a Recession?

The Dow Jones Industrial Average usually gets the most attention, but it is the Dow Jones Transports that often gives the early signs of trouble. Transport and delivery companies are the first to find out when there is a slowdown in global trade. And in some cases, a slowdown evolves into a full-blown recession. Despite…

Read More »

DXY Bulls Should Worry as Bearish Evidence Abounds

The bulls have been in control of DXY during most of 2018 and gradually conquered more land in the first months of 2019, as well. The USD index recovered from its February 2018 low of 88.25 to as high as 98.33 last month. The bulls can really be proud with the total gain of over…

Read More »

NASDAQ Bulls’ Resiliency has its Limitations

The NASDAQ 100 index closed at a new all-time high of 7826 last week, powered by strong Q1 earnings reports by Amazon and Microsoft, among others. The index is up by 650% from its 2009 low and by 884% since the bottom of the dot-com crash in October 2002. Looking at than phenomenal growth, one…

Read More »

Nifty 50 to Fall Below 10 000 Level Again?

It has been almost five months since our last update on the Indian Nifty 50 index. On September 25th, the benchmark was trading around 11 000, following a pullback from the all-time high of 11 760. Still, the Elliott Wave analysis below suggested it was too early to buy the dip. The daily chart of…

Read More »

More analyses