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All through my previous posts I had been mentioning about Elliott wave “Guideline” at some places.A guideline is a highly probable event that may be happening.But at no point a Elliott Wave “Rule” should be broken.If broken, something else is happening than what the Analyst had been thinking.
In Nifty Daily, the 4 th wave has touched 7840, the top of wave 1, though not closed below it.But this is a rule which cannot be broken.If broken, one of the two things are happening :
1) A Diagonal triangle is forming,( see yellow and pink markings)
2) Or the 5 th wave has already completed and we are in correction ( see blue markings)
I believe a Diagonal triangle or 1st alternative is forming ( not shown with trendlines to avoid too many markings).After finishing 4 th wave of the diagonal triangle we may see wave 5 up as shown by yellow markings and pink trendlines on chart.If diagonal triangle is forming, a break below 7840 is permissible , but not violent breaks, and then trend should resume up.So watch 7840 -7800 area.
At no point should we break 7540, if this count is valid.
The Alternative scenario is marked in blue, where a truncated 5 th wave or 5 th wave failure has occured and we are in correction.This may lead to some long term corrections.
Conclusion : Watch that we don’t stay too long and too much below 7840-7800 to be bullish.
Weekly Nifty if you look at, is forming a series of 1-2 , 1-2 .So longer term panics are not seen, since 3-4-5 has to be formed.But brace up for the correction, if it happens.