11484 is Major Trend Reversal Point of Nifty Between 10585-12250

| May 24, 2019

Nifty opened higher at 11901, bounced further to register new life time high 12041 but failed to sustain at higher levels and declined back by more than 400 points to register day’s low 11614 and closed 80 points up at 11657.

Yesterday, overall pattern was indicating bounce of 296-478 point from 11706-11598 range and downward reversal was expected after break below 11598. Later updates were sent during live market hours which work better.

Nifty bounced more than 278 points from last low 11682 and register high 12041 but declined back later. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress. Wave ‘5’ achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave 5 achieved 12041 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart.  There is slight change in wave counts on this chart.

It seems, inner wave (1) of 5 completed from 10004-10985, wave (2) may be completed from 10985-10585 Double Irregular Correction and wave (3) may be completed from 10585-11856.

Wave (3) is less than 161%, thus not extended. So, wave (5) needs to be extended.

23%-38% retracement of wave (3) is placed at 11697-11484. So, 11697-11484 is major support and 11484 is major trend reversal point on downside. Nifty can bounce minimum 778-1258 points from 11697-11484 range but if it breaks and stay below 11484 can result in big decline towards 10585-10004 again.

Now, let’s have a separate look at progress of wave (4) on lowest possible time frame.

This is 5 minutes time bar chart of Nifty covering decline from all time high 12041 which I marked as start of wave (4) on daily chart.

It seems wave (a or 1) completed from 12041-11779, wave (b or 2) may be completed from 11779-11859 and wave (c or 3) may be in progress. Wave (b or 2) retraced less than 23%. Normal 100%-123% projection for wave (c or 3) is placed at 11597-11535.

23%-38% retracement of progress of wave (c or 3) is placed at 11671-11707. So, 11671-11707 is immediate resistance and 11707 is immediate upside breakeven point. Nifty can decline further towards 11597-11535 from resistance 11671-11707 but if it trades above 11707 can result in further bounce towards 11859-12041.

Within wave (c or 3), it seems inner wave (i), (ii) is completed and (iii) or (iv) may be in progress as marked on chart.

Conclusion

For Short/Medium Term: – Nifty declined without achieving 12252 which changed the pattern. The wave started from 11682 which we were expecting as (5) may be inner wave (v) of (3) because (5) needed to project minimum till 12252.

Now we are in the same situation again, 11697-11484 is major support and 11484 is major trend reversal point on downside and overall conditions are indicating minimum 778-1258 points bounce from 11697-11484 range. But if Nifty breaks and stay below 11484 can result in big decline towards 10585-10004 again.

For Intraday or Very Short Term: 11671-11707 is immediate resistance and 11707 is immediate upside breakeven point. Nifty can decline further towards 11597-11535 from resistance 11671-11707 but if it trades above 11707 can result in further bounce towards 11859-12041.

We needs to keep these conditions in mind while deciding next trade.

Trading Points of View:

11597-11484 is low risk Buying Range for positional longs and targets will be minimum 778-1258 points if Nifty bounces without breaking below 11484. Breaking and staying above 11707 will change the scenario, we need to look at whole pattern again if Nifty breaks above 11707 without breaking below 11707. On the other hand, a downside corrective pattern needs to complete in 11597-11484 range for confident buying which is not completed yet.

Positional Selling can be done after trading/closing below 11484 only, but entry levels and stoploss for selling can be calculated after breakdown only.

11671-11707 is low risk selling range for Intraday for targets 11597-11535 and Intraday Buying can be done after trading above 11707 for 5 minutes expecting 11859-12041 as upside targets.

Calculating of Stoploss:  Actually breakeven is main stoploss as you already has observed how Nifty reacts near breakeven point of Elliott Wave Analysis but still it is not exact, so, we can place some margin for stoploss.

  1. If price is trading in Support/Resistance range near Breakeven Point then stoploss can be placed some points beyond Breakeven Point. If breakeven point is upto 100 points from last low/high then stoploss can be placed 15-17 points beyond breakeven point, if it is more than 100 points then stoploss can be placed 33 points beyond breakeven.
  • If breakeven point is broken then entry levels and stoploss for reverse trade can be calculate after seeing the pattern of breakout/breakdown only.

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Category: Nifty

About the Author ()

Deepak Kumar is an independent Technical Analyst, regular practitioner and Trainer of Elliott wave theory applying Elliott's Wave Principles on Indian Markets successfully since 2011 and made many accurate predictions. He is also the author of book "Practical Application of Elliott's Wave Principles by Deepak Kumar"

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