FIN NIFTY : POISED FOR A CUT OF 30%

10 thg 12, 2023

Nifty Fin Service Index or Nifty Fin has been in a long term uptrend and post Covid low the bulls upped the ante, in the process the index from the low of 7984 recorded in March 2020 is currently quoting at 21213.
The index since 2012(read inception) has managed to chart out classical IMPULSIVE advance and the same we have shown in Exhibit 1. At current juncure the prices are travelling in wave (v) of wave (5) of larger degree wave (V). This is alarming as the students of Elliot wave Analysis will testify that the the extensions in wave (V) generally lead to a larger degree corrective decline and in the present scenario not only the extention but the bigger problem is of wave (5) of wave (V) forming a classical ENDING DIAGONAL pattern as mentioned in the book “Elliot Wave Principle: Key to market behaviour by A.J. Frost and Robert Prechter”.

The last segment of ENDING DIAGONAL is underway and the maximum upside target is 22275.45(a move above 22275.45 will make wave (iii) the shortest among waves (i), (ii) and (iii). This event of Fin Nifty quoting above 22275.45 will completely reject the ENDING DIAGONAL hypothesis and in that case the same will signal a continuation of the longer-term uptrend in the form of 1-2, 1-2 extensions.
The ideal target of wave (v) topping is in the vicinity of upper trendline connecting tops of wave (iii) and wave (i) and the same is a stone’s throw away around 21400(+/-50 points).

If the Ending Diagonal does play out then the expected target on the downside is at least a test of wave (4) low which is the beginning point of our ENDING DIAGONAL and the same is placed at 14857.
This is the minimum projection and if we take into account the Glenn Neely method of analysing Elliot waves then the time target for the same would be around or before 26th April 2024(ideal) and max time target by the end of first week of September 2024. Meaning the index is set for a target of 14857 and the current price is 21213 indicating a hefty cut of around 30% in Index.
Time target is based on 25% and 50% time consumed by the Ending Diagonal to form. The Ending Diagonal as of now is 77-78 weeks old and 25% of the same gives last week of April as probable time target where as 50% puts the time target around first week of September.
The downside would be signalled on a move below 19420, low of wave b of wave (v) and in that case Index would be targeting the lower level mentioned above.