Technical Analysis and Elliott Wave Update for Nifty

Markets reacted from apprx. the Resistance zone given in last post of 5380-95. Now the closes after that have been above 5300 and the down sessions have been on comparable lower volumes. The Weekly close has been neutral . Lets check out the probabilities and factors supporting both the causes.
 

1. Elliott wave analysis throws up a short term Bearish probability which may turn out further Bearish in medium term . Check the charts below carefully with observations in each .

We may be trading in a larger Time Frame B wave that may be a Triangle ( or alternatively a Flat ) .

The C wave of the Triangle may have been done ( or the B wave of the Y as in purple counts above )

We may have started the new leg down completing wave 1 of it.

We may be in the wave 2 (if correction is going deeper ) or alternately wave B ( for a shallow correction ) .

The above bearish view invalidates above 5378 and we then look for higher targets of the c-C  as in previous post  (now may be doing 1-2, i-ii from 5032 for bullish counts or a v-c left for completion of the C ) --- Check Here.

2.  The Targets down if we correct below 5378 may be these Fibonacci retraces and Gap fill .

3. The Options data as of now is supportive of the correction below 5400 with supports near 5100 and 5200 . The Open interest of 5400 calls being higher than that of 5300 puts and Support now developing near 5200 with addition in puts there in the last session .

4.  Bearish Indicators :

The VIX and Weekly ADX are at rock bottom values suggesting bigger move to come ahead which has higher probability of being down as of now . 

5.  Bullish Indicators :

The  Bullish Pattern on the hourly chart of Inverse Head and Shoulders is a caution.   

The important Moving Averages for Long Term now show a Bullish alignment after 2010.

 In the Stock Market , Liquidity is the primary mover  and this rally since start of 2012 is backed by FII inflows and can invalidate the bearish view as it shows no sign of letting the steam off .

So in the short term :

1. Bearish below 5294 and close below 5300 . Resistance in 5330-50 zone now .
 Bullish above 5378 and close above 5350 .

2. Targets below may be in zone of 5230-5200 initially . Targets up may be apprx. 5430-50 .

3.  The probabilities of correction being a shallow to end near apprx 5200 or below it for a larger one in Medium Term equally exists.

4. Long term Bullish indicators cannot be ignored till they give reversal signals . 

We review as we move near important levels mentioned above.

Trade with Price signals and Caution ahead .