Nifty opened bit higher at 8244 and bounced to register day’s high 8250 but failed to sustain at higher levels and traded with negative bias for rest of the day. Nifty declined by more than 60 points from high to register day’s low 8185 before closing 31 points down at 8192.
Yesterday, selling was suggested if Nifty trades below opening price at 9:31 AM with stoploss of day’s high (high made till 9:31 AM) expecting targets towards 8128-8066. Nifty was trading in 8231-8237 at 9:31 AM (below opening price) and declined further by 50 points to register day’s low 8185 without hitting stoploss. Let’s have a fresh look at latest charts for further scenario.
Today I am covering decline from 10 Nov 2016 high 8598 to conclude short term movement as pattern of previous waves are not completely clear.
This is 30 minutes chart of Nifty covering decline from 10 Nov 2016 high 8598. This is the same chart with explanation which I had explained in my last report because there is no major change in wave counts on this chart.
It seems waves 1, 2, 3, and 4 are completed till 8210 and (5) is in Progress from 8210. Wave (4) is Irregular Correction. Wave (5) may be completed at 7916 as it has already achieved 61% projection and in extended zone but I am not able to identify its pattern confidently.
8210, start of wave (5) of last impulse is Reflex Point in this case which is already broken but wave (5) was extended and retracement is not faster which is point of confusion. The whole decline from 8598-7916 is already retraced by 38% after breaking 8176 whereas 61% retracement is placed at 8337 which may or may not be achieved.
We need to analyze the pattern of bounce from low 7916 to conclude further movement.
This is 15 minutes time bar chart of Nifty covering bounce from 21 Nov 2016 low 7916.
By looking at the pattern of whole bounce, there is Ending Diagonal Triangle like pattern at top from 8066 (Ending Diagonal is always wave 5), so the whole bounce from 7916 may be impulsive with wave (5) as ED. So, by keeping this ED in mind,
Wave (1) may be completed from 7916-8055 (pattern is not clear), wave (2) may be completed from 8055-7952, wave (3) may be completed from 8055-8122, wave (4) may be completed from 8122-8066 and wave (5) may be completed from 8066-8250 as ED which projected more than 61% after breaking above 8193 and is already extended. Learners, please looks at the inner wave counts of ED carefully.
38%-61% retracement of this expected impulse (from 7916-8250) is placed at 8122-8043 which is the expected targets range if we are right at identifying waves. On the other hand, if the bounce from 8066 is really progressing as ED and is extended wave (5) then Nifty is can give sharp decline towards 8066 after completion of ED because extended wave (5) often retrace 100% with speed.
If we look at declined from 8250 then, may be wave (1) and (2) are completed and (3) in progress (it may be (abc) also). End of wave (1) is 8203 which must be the stoploss for existing shorts.
As I explained yesterday, Nifty broke 8210 (Reflex point) and bounce from 7916 is also showing the characteristics of impulse but 100% retracement of extended wave (5) started from 8210 was not fast which is the point of caution. (We generally see extended wave 5 retraced by 100% with fast speed). So, we need to wait for a downward corrective wave to form for the confirmation of medium term reversal.
Because even if the reversal is happened, then also the slower impulse started from 7916 will be inner wave (1) of big upside impulse and we will see a corrective decline as wave (2) after completion of wave (1) before start of next sharp, fast wave and bigger wave (3) upwards. Otherwise there are still chances for decline below 7916.
For Short Term, Nifty has possibility to decline towards 8122-8066 and stoploss for existing shorts must be 8203. But decline towards 8066 must be faster as wave (5) started from 8066 is highly extended. So we need to keep all these conditions in mind to make strategy for managing our trade.
For Trading Point of View:
For Medium Term, though some conditions matched for reversal but still there not a complete conformation. So wait for a perfect confident entry levels to take any positional trade.
For intraday/short term, Shorts taken yesterday in 8231-8237 range must be hold with fresh stoploss of 8203 expecting targets towards 8122-8066. And further keep changing stoploss of 30 points once Nifty breaks below 8173 because decline is expected to be faster otherwise any delay may initiate bounce.
Nifty Intraday Trading Strategy based on opening price at 9:31 AM
Many of my Elliott Wave book subscribers ask about Intraday Trading Strategy I mention sometime in my analysis reports to initiate at 9:31 AM because this strategy is not mentioned in my “Elliott Wave Book”.
“Nifty if traded above opening price at 9:31 AM then buy with stoploss of low made till 9:31 AM AND Nifty if traded below opening price at 9:31 AM then sell with stoploss of high made till 9:31 AM.
I want to inform that this strategy is not based on Elliott Wave Theory but based on price action. And this strategy is part of my other book on Day Trading titled “NSE Stocks Intraday Trading Techniques”.
These trading strategies works best in trendy market and works better on stocks but can be used on index also. I use it on index when waves or not clear but I am expecting a big move on either side OR when I have targets but don’t have small stoploss and you must have observed that it works most of the time.
So at last, This trading strategy is not based on Elliott Wave Theory so I have not mentioned it in my “EW Book” but I suggest trades based on this strategy in my reports as bonus when conditions are better and waves are supporting for this strategy.
The link to details of book “NSE Stocks Intraday Trading Techniques”is http://sweeglu.com/stock-trading-strategies-ebook/.
Click Here to Learn Practical Application of Elliott Wave Theory in real time trading/investment from the deep experience and true knowledge of Deepak Kumar .
Click Here to subscribe for Daily Elliott Wave Analysis Reports of Nifty with Stop loss and Trading Strategy by email.
Click Here to know what subscribers/clients says about my services