Nifty opened Gap Up today and bounced above yesterday high 8427 again as I expected in my yesterdays report Nifty Elliott Wave Analysis and Outlook for 20 May 2015. Nifty touched the high of 8440 in morning session followed by range bound consolidation between 8400-8440 and closed 57 points up at 8423.
Now, let’s have a look on latest charts to see further probabilities.
This is 15 minutes time bar chart of Nifty covering move after 07 May 2015’s low 7997 which I am expecting a start of impulse. I am showing the wave counts after 7997 only as previous counts as same as I explained in my Elliott Wave Analysis Report of Nifty for 08 May 2015.
There is no change in pattern yet, as it seems an impulse completed from 7997 to 8332 followed by corrective decline from 8332 to 8091 as shown on chart. The upside impulse can be wave (A) and corrective decline which is in “abc” pattern can be wave (B) followed by the start of next impulse from 8091 which may be wave (C).
Wave (C) already achieved 100% projection of wave (A) after hitting 8426 but structure of waves is not suggesting its completion yet. Structure of wave (C) is still suggesting it somewhere near the end of its inner wave (3) as shown on chart.
We can see a correction of 23% to 38% for wave 4 after completion of wave (3) if I am right at identifying the pattern levels are around 8368-8324 if I calculate from recent top 8440 which will change if Nifty shows new top. Top of wave (3) of (C) seems near. Let’s have a look on today’s intraday move on separate 5 minutes chart.
This is 5 minutes time bar chart of Nifty covering move after yesterday’s low 8338 which I am expecting as the start of last inner wave (iv) of (3) of (C). It seems inner wave 1, 2, 3 and 4 are completed and 5 is in progress and can project till 38%-61% which is placed at 8440-8463. There may be some decline after completion of wave (5) of (v) as explained in first chart.
Nifty have again achieved our minimum expected target of 8427 and charts are suggesting that the completion of wave (3) of (C ) is near, may be in 8440-8463 range. And we can see 23%-38% correction of wave (3) from top which is roughly placed at 8368-8324 as per present scenario.
So profit booking or part profit booking at higher levels is the best strategy here to re-enter again at lower levels after identifying completion of correction. Those who still want to hold positional longs can use stop loss below 8320.