As per the position of the TOs, the Triple Trend Oscillator, which monitors trend momentum across multiple time frames, the long term trend shows a consolidation pattern which could be wave 4 of the new bull market which started in the second half of 2013. With the wave A down complete at 7942, we are currently in wave B up which may last till 8800-8900, only to be followed by wave C down to the lows of 7800-7900.
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| Nifty Weekly |
The pattern was hinted by TTO and first reported in our post http://eqtrend.blogspot.com/2015/04/nifty-update-abc-correction.html when the Nifty started its correction from 9100 levels in March 2015.
What confirms this view is the fact that the medium and long term TOs on TTO weekly charts are in a 'moderate' downtrend, with the short term trend indicating an up move. Once the up move weakens, the downtrend will resume.
Also using Elliott wave along with TTO indicates that wave 3 was completed at 9067 ( Synchronized Bullish Alignment), but a new high will be achieved once thew A-B-C correction is completed (wave 4). The new high (Wave 5) will have slower momentum to reach a Nifty target of 10500, which was the original breakout target for Nifty (breakout at 6250-6300 levels). The target could be reached sometime during 2016, which coincides with 8 years cycle followed by Indian markets.
Read here more on Elliott Wave and TTO : http://eqtrend.blogspot.com/2014/04/elliott-wave-tto.html
Related post : http://eqtrend.blogspot.com/2015/01/sensex-eight-year-itch.html
As per CLSA :
"In next three months, we see Nifty consolidating around 8,800, which will be the cap of the current rebound that we are witnessing," he said.
According to Mr Balanco, Indian markets are going through a consolidation phase so June lows (7,940 on Nifty) are possible again. It is for this reason that CLSA advised its clients to stay away from the current consolidation phase.
"Before we see a real secular uptrend we can test the June lows again... Market is forming a triangle pattern which makes us believe that market may see lower levels again," said Mr Balanco.
