NIFTY 50 - How far the Market can fall?

Market participants are persistently speculating about the conclusion of the current bull trend; however, the upward trajectory remains unbroken despite two significant events—the Election and the Budget. Following international news regarding a hawkish stance from Japan, it appears that the trend may be shifting in the near term.

Let us analyze the recent decline from both fundamental price action and Elliott wave theory.

1. After an extended period, we have observed the emergence of a three black crows pattern at the peak. This is a strongly bearish indicator that typically precedes a decline of 10-12% following a minor pullback. Based on this pattern, we could anticipate the Nifty index dropping to approximately 22,000 levels.
2. According to Elliott wave analysis, minor wave 3 of major wave 5 has recently concluded. We are currently in the 4th wave, which may retrace to the 23%-38% Fibonacci levels, aligning with the decline targets indicated by the three black crows pattern. This could manifest in an ABC pattern, where wave b retraces 23-38% of wave A, which is currently unfolding.

In conclusion, the Nifty index is in a sell-on-rise phase until it reaches the 22,000 level, at which point we may witness another rally towards 26,000 as part of the final 5th wave.

Disclaimer: Please note that the information presented in the analysis is intended only for educational purpose. It is highly recommended to see advice from financial advisor before making any investment decisions. I cannot be held accountable for any financial loss that may arise