In spite of sharp fall in Nifty neither of our elliott wave counts can be completely ruled out. The price substructure right now also seems to be insufficient to take a conclusive view in either direction. In such scenarios the only option is to wait for important levels (mentioned below) to be taken out before taking a call on the medium term out look for Nifty. Chart Below:
As per our most bullish scenario, we may continue to look at the fall as a wave 2 fall after end of wave 1 (of III). But this fall shouldn’t extend below the crucial 78.6% level around 10815 for too long. So from a long term bullish out look perspective this becomes a very important level. If we don’t sustain below this level, we can expect a substantial rally towards all time highs. A break of 10815 would make it very likely for us to take out the crucial 10557 level which would be a confirmation level for our alternate wave count (shown as Alt: A/B/C in chart above). In this scenario a deeper cut in stock markets can be expected over the medium term.
From a short term bullish perspective we should wait for break of 11212 before getting our hopes up.. A break of 11212 should pave way for test of crucial 11350 levels.
Important Medium Term support: 10815/10557
Important Short Term Resistance:11212/11350/11525