Published on 18th October 2018
Indian equities are full of opportunities for those who understand the big picture and risks for those who don’t. What is next on the menu for the Nifty 50 index?
The broad-based Indian equity index shows an impulsive wave from 2016 into the 2018 high. The impulse has a third wave extension. Moreover, we see alternation between a swift and deep second wave and a complex and shallow fourth wave. All in all, this looks like a textbook impulsive wave that ended in 2018. The subsequent market action showed a swift sell-off from the August 2018 top. Most likely, there is another bearish swing to the downside left within that sell-off. However, this will be just the fifth wave of the entire impulse from the August high. This means that it will complete the entire downside trend that the Nifty 50 traced over the past six weeks.
All in all, this means evidence within the Elliottwave framework that the price action, which we saw from the August high, is just the beginning of something bigger. The price action of the past few weeks was probably just the appetizer of a bearish menu that will be served during the years ahead. It is still not too late to secure profits. The Nifty 50 will probably show a corrective rally to offset the sell-off since this August. However, after that rally, the money will be made most likely on the downside. The Nifty 50 is most likely ripe for the biggest correction since the financial crisis of 2007.
Our premium Nifty 50 analysis discusses the magnitude of the imminent bear market. Moreover, we also focus on shorter time frame swings. These may be important entry or exit points for investors and traders.