Elliott Wave Analysis and Outlook of Nifty for 07 July 2016 Onward

| July 6, 2016

Nifty opened almost flat on Tuesday at 8379 and traded with weakness for rest of the day. Nifty declined about 50 points from previous close to register day’s low 8319 before closing 35 points down at 8335.

In my last report, I mentioned that a very immediate top is very near and expected a 23%-38% (80-140 points) decline towards 8317-8267. I advised to reduce the position or book profit in positional longs to enter fresh again after decline and even intraday shorts can be taken with small stoploss expecting targets 8317-8267. Nifty declined till 8319 on Tuesday and let’s have a fresh look at latest charts for further scenario.

Previous Daily Elliott Wave Analysis Reports of Nifty are uploaded on my Facebook group “Practical Application of Elliott Wave Theory” in PDF format.

Today I am showing move after 29 Feb 2016 low 6825 as Nifty broke previous high 8294.

Elliott Wave Counts of Nifty on daily chart

Elliott Wave Counts of Nifty on daily chart

This is daily time bar chart of Nifty covering move from 29 Feb low 6825. This is same chart with explanation which I explained in my last report as there is no major change in wave counts on this chart.

Though this bounced progressed with lots of overlapping of waves which made it tough to identify counts but still I am marking most probable counts based on my understanding.

Nifty broke previous high 8294, so we need have a new look for further probabilities. By casual look it seems an impulse completed from 6825-7992 which could be wave (A) of (1), decline 7992-7678 may be wave (B) or (2) and wave (C) or (3) may be in progress from 7678.

Minimum 61% projection for wave (C) is placed at 8399 and minimum 100% projection for wave (3) is placed at 8845. 61% projection at 8399 is almost achieved possible but 8845 is not confident seeing present wave’s structure so we need to look at inner wave counts for further progress.

There is overlapping within the progress of wave (3) or (C) so we need to wait for clarity. We need to concentrate on last bounce from 7927 to conclude further probabilities and to make further trading plans.

Elliott Wave Analysis of Nifty for 07 July 2016

Elliott Wave Analysis of Nifty for 07 July 2016

This is 15 minutes chart of Nifty covering move from 24 June low 7927 which I am expecting as a progress of new impulse upside.

Earlier there were both the possibilities for this move to be (ABC) or (123) because bounce from 8056 was getting slower and 8175-8249 was expected in both the cases. So, we were going with both the possibilities as 8249 was expected in both the cases and we were moving with trailing stoploss. Now Nifty achieved 8249 on 30 June 2016 and the bounce from 8056 is gained speed with gaps giving the indications of wave (3).

So, as per latest scenario, it may be wave (1) completed from 7927-8120, wave (2) completed from 8120-8056 and wave (3) may be progress from 8056. Wave (3) seems completed from 8056-8398 and is extended. Wave (3) progressed with continuous gap till now making is difficult to identify inner waves confidently, maybe it is just (iii) of (3) completed rather than (3).

I am assuming it (3) completed at 8398 because no matter if it is (3) or (iii of 3) completed at top, wave (4) or (iv of 3) downwards we can expect downwards in both the cases. 23%-38% retracement of whole wave (3) progressed till now is placed at 8317-8267 where 8217 is almost achieved and next 8267 must be the stoploss of positional longs.

Now let’s have a look at decline from 8398 for very immediate probabilities.

Elliott Wave Analysis of Nifty for 07 July 2016

Elliott Wave Analysis of Nifty for 07 July 2016

This is 5 minutes time bar chart of Nifty covering decline from 04 July high 8398 which I am assuming as progress of wave (4) till now.

It seems an impulse is completed from 8398-8319 which can be wave (A or 1). Further 38%-81% retracement for wave (B or 2) is placed at 8349-8367.

So, in normal circumstances (B or 2) can rise towards 8367 followed by wave (C or 3) towards 8317-8267. But if Nifty declined from present levels then 8267 is the point around which we look at the pattern formed again to conclude further move.

Conclusion:

Nifty started declining from 8398 and retraced almost 23% of wave (3) as expected in last report but 8317-8267 range is still possible with Volatility (up-down swings). And 8317-8267 is the range where we can decide further short term trade after analyzing the pattern and 8267 is the point below which the sign of reversal can be seen.

For short term, 23%-38% retracement of wave (3) placed at 8317-8267 is still possible with volatility and we can decide further trade after seeing the pattern formed in this range. 8267 Must be the stoploss for any positional longs as of now.

So for trading point of view,

  1. If Nifty bounce towards 8367 can be sold in 8365-8380 range with Stoploss 8389 expecting targets 8317-8267.
  1. If Nifty opened gap down or started declining from present levels then 8267 is the points at which we need to look at the pattern to initiate next trade.

Keep strict stoploss on the trades as volatility can turn unprotected trades into huge losses.

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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"