The below article is picked up from "The Financial Waves short term update" by Waves Strategy Advisors. For subscription to daily research reports visit http://www.wavesstrategy.com/index.php/store.html
Bottom Line: Nifty continued to have a Gap up opening, fill it on intraday and close near the highs. Nifty other scenario analysis shows alternate possibilities as even Reliance Industries has now closed above 950 levels!
Nifty Weekly chart: Scenario analysis 
Nifty daily chart: Scenario 1
Nifty daily chart: Scenario 2
Nifty 60 mins chart: as per Scenario 1
Wave Analysis:
In previous update we mentioned that“Market reaction to RBI policy will be crucial. This time bond yields have actually eased from near 9% to 8.88% indicating there should not be any rate hike. In short, the trend is positive as long as prices does not close below 6630 – 6650. Volatility can be high based on above mentioned event and Time cycle today.”
Interestingly, consecutive for 5 trading sessions Nifty had a Gap up opening with respect to previous day’s close and fill it almost instantly or within first few hours. Yesterday was no exception. Nifty opened near 6730 level with a Gap of around 26 points and immediately turned flat. The trading happened within the range of 6675 and 6730 but the intraday volatility was high as expected.
RBI maintained its status quo and did not change key policy rates. This was in lines with majority expectations but still Bank Nifty started showing weakness and closed more than a percent lower. The high made by Nifty during opening hour was exactly on the hourly cycle.
As shown on daily chart, prices have still not formed a lower low nor close below previous day’s low. As long as this structure is intact the trend will remain positive. Close below yesterday’s low near 6670 will be first sign of weakness. We are also showing Moving average difference indicator. This is a very simple tool to measure momentum. Any strong trend will result into short term average moving away from the longer term average. After the trend has run its course the short term average will mean revert and return back to the long term average. This will create a rhythmic expansion and contraction movement in this indicator. However, as shown the current up move from 6490 has failed to move this short term average sufficiently away from the bigger average and so we are getting series of negative divergence on this indicator.
As shown on hourly chart, RSI has continued to produce series of negative divergence and the upside momentum has been faltering. Unless we see break above the blue channel the current wave structure that prices are in wave c of 3rdcorrection remains valid. Break of 6630 will further confirm this scenario.
In short, so far the trend is up as Nifty still did not close below previous day’s low. If the reversal does not happen in this week we will have to change various existing parameters since it will indicate the market dynamics valid since 2008 has now changed!
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