Nifty Elliott Wave – Price Action Crucial!

Elliott wave is advanced Technical analysis concept that helps to understand the overall maturity of trend.

Price action is crucial along with Elliott wave to confirm that prices are behaving as per the expected path.

Nifty hourly chartElliott wave analysis - Nifty after forming a low in march 2023 moved up in impulsive pattern. However, after forming a top near 19990 in form of wave 3 prices reversed on downside and is still moving in form of wave 4.

Wave 4 usually has tendency to break trendlines and channels to retrace a portion of wave 3. We can see here that wave 4 broke below the blue trendline support and is still ongoing.

Price action is important from here. Break below 19220 can result into selling pressure taking prices lower in form of wave 4 which can be below 19000 psychological levels. On upside strong breakout above 19400 followed by 19490 is required to confirm start of wave 5 higher.

Combining price action along with Elliott wave can provide high conviction trade setup. Also wave 4 has tendency to give false moves thereby trapping both bulls and bears on either side which is clearly seen now. This is wave 4 characteristics or wave personality.

In a nutshell, Nifty is stuck in a range giving false moves without a trend. Move below 19220 will extend this wave 4 further whereas move above 19400 required for a meaningful upside reversal.

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