Nifty on 24-07-2012

As A was a fast & furious Impulse, chances of C being a diagonal were always emphasized by me.
A had taken 45 trading sessions--
C has already done 36 sessions and now the likelihood of its taking the form of a 3x3x3x3x3 diagonal is very high.Going by Fibonacci correlation,it may take upto 73 sessions(1.618 times) to reach its target. This Target Ideally C=A=5900+


Now lets have a look as to how this C has done so far:
(Please bear in mind that now we are taking C as fanning out in the form of a 3x3x3x3x3 diagonal:

Now,as shown in the chart above:
C1=4770-5348=578
C2=Targets 50% retracement=5059-----62% retracement=4990 
Inside the C2:
A=Impulse=5348-5218=130
B=5218-5267=49
C=5267 downwards in play can do a maximum of 210 points(1.6xA)=5056
c1=5267-5168=99(as a diagonal)
c2=5168-5257
c3=5257-5108*=149(150%)--this is where we stopped yesterday--ideally this c3 should be doing minimum 1.62*c1 and that is why yesterday I had given the target of 5097.
By not doing 1.62*c1, doors were kept open for c4 to go above 5168(even upto 5257) and c5 to come down again by more than 149 points


So today,if we open below 5097,then we may go upto 5150-60 (as c4 )and come down again (as c5) to end the wave at 5060-5070.
However,if 5097 remains unbreached then we may go up to not only fill the gap at 5198 but even upto 5225 --in following manner:

Conclusion:
If 5097 gets breached in the morning itself(i.e c3 gets extended),we may see an intraday recovery to 5150(as c4) but again fall to levels below c3(to complete c5).
If 5097 remains unbreached,we may keep grinding & inching upwards----as c4 to build a diagonal C as shown in the chart above.
2.50PM

Why I wrote C3(if ended) because the subwave4 of C3 might have played out as an Exp Flat as shown in chart below--keeping the option of subwave5 of C3 open to go below 5097

EOD:
Nothing more to add----C4 & C5 are in pending list.And C3 has not become extended as yet(keeping the option of C playing a diagonal--with C4 going into C1 territory---open.)
As number of shorters--primarily because of global sentiment---being very high,they are likely to be squeezed by a slow,grinding but ascending C4 going upto even 5225----however this probability assumes that C3 will not get extended i.e. Nifty will not go below 5097 tomorrow at opening time.
If it does,then C4 will be shallow and remain below 5160--- but remember even if we open below 5097, we will keep grinding the whole day tomorrow in 5100-5160 range.

Raghu