Nifty: EOD 29.12.2011

Continuing with yesterday's updated chart:



Yesterday I wrote:
Q
On Hourly Charts the Downmove started from 4800 can be seen as:
SW1=4800-4686*
4800-4751
4751-4772
4772-4686
4686-4727
4727-4698* likely to test 4675-4680
Then SW2 upwards by 61.8%=4750
UnQ

While Nifty paused at 4672 and moved up but instead of going upto 4750,remained limited to 4702 thus retracing the minimum 23.4% instead of the optimum(for SW2)61.8%.And I take that as a sign of downward momentum and foresee a gap-down move tomorrow.
Thus we have:
SW1=4800-4672
SW2=4672-4702
SW3=4702-4639*
And as per the chart above,this SW3 should take us down to minimum 1.62*SW1
i.e.4494


But I would like to add a word of caution here.


The downmove started from 4800,after the finishing of WXY may be X(a 3-wave form) of a triple combo WXYXZ as in following Chart:




So taking a conservative view,this SW3 has the possibility of playing out even 0.62*SW1(min) and that comes to 80=4622 or optimally 4574(=SW1)

Now the common point of both the Counts is their similar direction.And I personally believe that once below 4633,4574 should be seen easily.After that the momentum play would decide the final pattern.

So I am assigning two targets for this SW3:4574 and 4494

Stop loss for Shorts tomorrow should be 4702.

Raghu