Nifty Next 50 Analysis. As on Saturday 23 Oct 2021. CMP 42,403.
Bottom line : A top appears to be in place at 45,290. Lower to 39,000 is the expectation.
From previous post of 4 Oct "Sideways consolidation in Nifty Junior before a thrust up to 44,500 ~ 45,500 to complete the rally"
The broader market has turned lower, and Nifty Junior is very much in the thick of it.
If wave 3 of primary degree is complete at 45,290, as we expect it is, then wave 4 should make its way down to the 4th wave of lower degrees, either to the 39,000 level, or to the 34,000 level.
The weekly chart also shows a bearish engulfing candle, which is confirmation that a top is in place.
2 month chart : Notice how wave 2 of primary degree was sharp and deep. This is important because we can now expect wave 4 of same degree to be sideways and time consuming (guideline of alternation). This means many opportunities on both the long and short side. So this larger 4th wave is likely to take the shape of a triangle or flat. Hence the decline to the 39,000 level or at most the 34,000 level is the expectation.
An idealized scenario would look like this for the larger sideways 4th wave to play out. Note this is just an idealized, and totally hypothetical scenario. Wave A down would be the sharpest, to either 39,000 level, or 34,000. If the top is in place, we are currently in wave A down, so brace for more downside in coming days.