Nifty made a low of 9341 around May 24 and has rallied since. We have shown the probable (and alternate) wave count below:
In all probability wave 1 (part of the larger wave 3 that started from demonetization lows) ended around 9520 level and was followed by a complex correction (which started with an irregular correction resulting in Nifty making a high above the crucial 9525 level). This complex correction extended to 9342 level which was probably the wave 2 low (or as per the alternate count the wave A low).
The magnitude of wave 2 correction should ideally be larger than all other corrections of lower degrees of wave 1 move. This however is not the case here. But this is more of a guideline and not a rule. Nevertheless this leaves out the possibility that the entire move from 9520 to 9342 may be wave A of a larger A-B-C correction. However the price move since looks impulsive rather than corrective, hence this up move from 9342 levels is unlikely to be a wave B of an A-B-C correction. Hence fishing for a major short move to capture wave C may not be a prudent strategy (considering the alternate extremely bullish possibility)
Considering this it is likely we may have begun a wave 3 rally from the 9342 levels ( a wave 3 at various degrees) and this is a very bullish development. To give you a sense of the kind of levels one may expect for Nifty over the next year, the measured targets are placed at 10962/11966 (the 1.0 and 1.618 extension levels). This will be very likely if the wave 2 indeed ended around 9342 as indicated by our analysis. This is because wave 2 was smaller in magnitude than is normally the case. A smaller magnitude of correction than normal is usually an indicator of an exceptionally strong market ahead.
In the short term important resistance level Nifty is the 9680 level. A break of which may lead to a fast move towards 9785/9880 level. 9630/9555 are important support levels in the short run.