Nidty - Daily Technical Snapshot :: HDFC Sec

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Is the bounce complete ? Day’s action formed a small inside candle with reasonable volumes at the support zone which indicates battle between bulls and bears to derive near term trend. Technically, the earlier said support of 8670 has provided a minor bounce back upto 8755 and failed to test 8780 levels. It seems like that bounce back leg has ended with small upward retracement and index is preparing for next falling leg. Actually at this point it is difficult to conclude that price has completed the bounce back; on a fall below 8670 we could confirm that some internal leg has ended at 8755 and next falling leg has begun for our next target of 8550 – 8400 which are 50% & 61.% retracement level of last major rising leg from 7961 to 9119. Trend wise short term downtrend is intact for the above mentioned targets but in near term slight uncertainty is in picture; either we may see one more minor bounce back to 8780 level or we have already completed that at 8755. However crucial resistance remains at 8820 level; as long as index stays below this level every rise could be used as a shorting opportunity. Post the five wave advance which started from 7961 and ended at 9119 level, so far price has retraced 38.2% downside and the next key retracement levels are 50% and 61.8% levels. In addition price is continuously trading below the 2-4 trendline and 21 Day EMA which are creating trouble for bulls and favoring to bears.

As per Elliot wave, five wave advance has completed at 9119 (this had started from 7961). The fall from the high of 9119 to 8850 is internal 1st leg and the 2nd retracement leg has ended at 8958, now 3rd leg is open down in which subdivided “wave i & ii” has completed and subdivision “wave iii” likely to begun for the targets of 8550 – 8400 levels.