Nifty EOD 26.8.2011

While it was known that the downmove from 4966 will take us below 4797 and W3 of which the current downmove is a sub-sub wave has a logical target of 1.618*W1=4745(please refer previous posts for details),the failure to identify the correct form for the last leg of this downmove,from 4896 downwards,led to the intra-day trade for today being fruit-less.Holding on longs as I believe we have fulfilled all the basic requirements for completion of SW3 of W3 and its end would be confirmed by a tick above 4793.

Now the wave form can be seen as:

Wave C from 5944 downwards--5 wave form--

W1=5944-5329=615

W2=5329-5740=411

W3= 5740-4720=1020(165% of W1)

SW1=5740-5497=243

SW2=5497-5702=205(85%)

SW3=5702-4797=905(372% of SW1)

SW4=4797-4966=169(18.6%)

SW5=4966-4720=246

4966-4896=70
4896-4931=35
4931-4839=92
4839-4896=57
4896-4720=176

An obvious lacuna is SW4 being only 18.6% of SW3(minimum should be 23.6%).An alternative that was in my mind was to treat this move from 4797-4966=169 as SW4(a) with SW4(b) going down,being capable of doing 1.382*SW4(a)=234=4732(4966-234).But even that was violated.

Then the only remaining alternative is to see SW3 continuing and having done 5705-4720*=985 (thus doing 405% of SW1-- still capable of doing another 50 points as maximum permissible is 425%).So in our endeavour to adopt the best alternative we should go for the following count:

Wave C from 5944 downwards--5 wave form--

W1=5944-5329=615

W2=5329-5740=411

W3= 5740-4720=1020(165% of W1)

SW1=5740-5497=243

SW2=5497-5702=205(85%)

SW3=5702-4720*=982(404% ) and capable of doing 4670(i.e. 425% of SW1)

Retracements,if they start now,should be treated as SW4 and minimum target should be 23.6% of SW3=231=4951.

Special thanks to Shriramoka for his interactions,privately and on various forums.

As always,inputs/suggestions are welcome.

Raghu