Elliot Waves Analysis Report of Nifty for 04 Sept 2014

| September 3, 2014

Nifty again touched new high today and close above new milestone of 8100. Nifty is continue in trend giving Gap Ups every day and rising without any reasonable correction and still not showing any sign of weakness. Almost every time frame’s chart showing Nifty in overbought zone but nifty still rising and surprising most of the traders/analysts every day.

Today also nifty opened Gap up and traded above opening price most of the day except 3 sharp falls till 8100 that had been bought into. In the morning I thought of selling at higher levels and also made plan but avoided later seeing latest conditions. Let me show you the chart I posted on my Facebook Wall.

000 Nifty

At morning we expected that nifty may rise till 8125-8135 again and there we can sell with stoploss loss of 8151 for lower targets. Nifty shown levels 2 times after that but I avoided selling. Even when Nifty was around 8136 second time I expected that it may correct to 8100-8090 again but didn’t sell and waited for dip to buy in the direction of main trend. After Nifty shown those levels I finally bought Nifty at 8111-8109 levels with stoploss of day’s low 8095.

Let me show you the further scenario:

Elliott Waves Analysis of Nifty

Nifty EW Analysis for 02 Sept 2014

In this chart it seems, Nifty completed an impulse from 8006-8132 followed by “abc” correction (seeing the personality and characteristics of waves). If these counts are correct then there may be a new up move of at least 60-90 points from low. That is the reason I took small risk of 15 points and bough end of the day just before closing.  

Now let’s see today’s move closely on chart: 

Elliott Wave Analysis Report of Nifty for 04 Sept 2014

Elliott Wave Analysis Report of Nifty for 04 Sept 2014

Here, When Nifty touched first high of 8132 in morning, I was waiting for any sign of reversal to take shorts but Nifty fell sharply and I didn’t get chance.

After seeing the sharp move from 8132-8102, it seems it was a complete impulse of 30 points. So I was in doubt if it is “A” of wave “1” of down move. So I waited to confirm, if it is faster “A” the “B” may go near high again.

At the end session nifty crosses 8132 and it was confirmed that it is “B” as “2” cannot go above start of 1. After “B” I expected C to go till 8100-8090 again but avoided trading it and waited for dip to buy. 

As the last move from 8141-8095 (wave C) was sharper, I was unable to identify it and again I waited to get long and waited for an upside wave followed by 50-70% correction. 

Finally,

I saw an upside wave from 8095-8121 of 25 points followed by a correction of 50% as “abc” move. And I entered longs at 8111-8109 with Stoploss of day’s low 8095.

Also by seeing addition of 6 Lakh Open Interest of Nifty futures with increasing price at Average price of 8142 and also addition of 6 Lakh contracts in 8100 put, the things were favoring some upside from 8100. 

Other Possibility, 

If the wave I taken as “C” is actually wave 1 or “A” then lower levels are also possible.

Trading Strategy: 

I am holding Nifty longs from 8109 with strict stoploss of 8095. I will trail stoploss to 8109 if trade goes in my favor and breached 8122 on upside again. Targets will see later. Roughly by seeing the wave 1 of 26 points I can expect total minimum upside of 60-90 points from 8096. 

 Will be in loss of 15-18 points if I am wrong here, loss may be more if Nifty opened more than 20 points gap down tomorrow.

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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