Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015

| September 6, 2015

This Elliott Wave Analysis report of Nifty I prepared on all time frame covering Nifty outlook for Long Term, Medium Term as well as Short Term. There is disturbance in market because of sharp fall in Nifty in last 02 weeks and most of my followers and subscribers are requesting for an idea of nearby bottom or further scenario. So, I looked at all time charts again to get idea for further probable move of Nifty in coming months or years.

Most of my followers also ask which best time frame is for Elliott Wave Theory Analysis and how to identify wave 1. So, read this report carefully and try to understand how started analyzing from long term and came to very last short term wave step by step.

So, let’s start with long term Monthly Chart:

Nifty Elliott wave counts on Monthly Chart

Nifty Elliott wave counts on Monthly Chart

This is monthly time bar chart of Nifty covering move after 2008. It seems a bigger wave (1) completed at 6357 in 2008 followed by more than 61% correction within one year. So, 2008 low 2252 may be end of wave (2) from where bigger wave (3) has started.

If we see the progress of bigger wave (3) started from 2252 in 2008, then it seems somewhere within 3rd degree lower wave (iii) of Bigger (3) which suggests that there is long way to go for Nifty before any big crash like 2008.

There is Leading Diagonal type pattern from 4532 -6229 in 2012 -2014. LD is always wave 1 and we can always expect a complete impulse after LD which also is suggesting that there is long way for nifty to go higher to complete impulse started from 4531 with Leading Diagonal Triangle. I have shown this LD pattern separately on weekly chart.

Let’s analyze move after 2012 low 4531 on separate weekly chart:

Nifty Elliott wave counts on Weekly Chart

Nifty Elliott wave counts on Weekly Chart

This is weekly time bar chart of Nifty covering move after 2015 low of 4531 which I am expecting as start of 2nd lower degree wave (iii) of bigger (3) with Leading Diagonal Triangle.

It seems a Leading Diagonal completed from 4531 -6229 as wave (1) followed by simple zigzag (abc) correction as wave (2) and wave (3) started from 5118. And Wave (3) seems somewhere within inner wave (iv) which corrected more than normal retracement of 38%. Whereas 50% and 61% retracement for wave (iv) is placed at 7525 and 7149 respectively. Maximum limit for wave (iv) is at 6415 (very rare case) which is end of wave (i) and wave (iv) can never overlap wave (i) within wave (3).

One can read my old report Medium Term Outlook of Nifty as on 26 July 2015 to see detailed inner wave counts of wave (iii) from 5993 -9117.

Wave counts till all time high 9117 of 2015 are clear, now we need to analyze decline after 9117 separately to get idea of bottom of current fall.

Nifty Elliott wave counts on Daily Chart

Nifty Elliott wave counts on Daily Chart

This is daily time bar chart of Nifty showing move after 2015 high of 9117. Though it is not easy to identify this corrective pattern but the recent sharp fall of more than 1000 points 8655 is suggesting that I may be “ABC” correction going as wave (iv).

It may be wave (A) completed from 9117-7997 followed by wave (B) from 7997-8655 as Irregular Correction and Wave (C) started from 8655. 100% projection for wave (C) is placed at 7535 whereas 123% and 138% is placed at 7270 and 7104 respectively. Wave (B) is irregular so wave (C) can project more than 100%.

So, 7525-7104 range may be bottom of long term before further upside for new high. But, 7525-7104 is big range of 400 points till now.   More nearby levels can be calculated when wave (C) actually reach near its end points.  So, we need to wait for more accurate levels of wave (C).

Wave (C) has personality to scare majority of traders/investor and create disturbance in bull market. Wave (C) often kills most of the weak bull before the start of new Bull Run. To know the personality and nature of wave (C), read this article carefully.  Concept of Elliott Wave Theory Explained – Personalities of Waves.

Also read my Analysis report of 28 July 2015 where I expected Nifty to fall below 7940 in Aug 2015 series when Nifty was trading above 8600. Read 

Now, its turn to analyze last sharp crash in Nifty from 8655 which may be progress of wave (c) of (iv):

Nifty Elliott wave counts on Hourly Chart

Nifty Elliott wave counts on Hourly Chart

This is hourly time bar chart of Nifty covering move after July 2015 high 8655. It seems move from 8655-8321-8621 can be waves (A or 1) or (B or 2) and (C or 3) may be started from 8621. I am not showing this move confidently as an impulse yet as we successfully identified the fall till now by seeing inner waves. So, concentrating mainly on inner waves as this small confusion will be cleared soon.

Within wave (C or 3), wave (1), (2), (3) and (4) are already completed where as wave (5) is in progress from 8091.  Wave (5) achieved its minimum requirement after breaking below end of wave (3), 7669 and projecting more than 38% which we already expected from 8037-8098 on 28 Aug 2015.

So, wave (5) achieved its minimum requirements where as normal 61% projection is placed at 7502. 100% projection is placed at 7139 which is rare care as of now.

So again, we need to see move from 28 Aug high 8091 to calculate more accurate levels:

Nifty Elliott wave counts on 15 Minutes Chart

Nifty Elliott wave counts on 15 Minutes Chart

This is 15 minutes time bar chart of Nifty covering decline from 28 Aug’s high 8091 Which I am expecting as start of inner wave (5) of (C or 3).

It seems wave (4) of this impulse completed at 7845 followed by start of wave (5). Here also, wave (5) achieved its minimum requirement after projecting more than 38% and breaking below end of wave (3), 7700. Whereas 61% and 100% is placed at 7603 and 7454 which may or may not be achieved.

If we see the progress of wave (5) started from 7845, it also seems within its last wave (v). Wave (iv) completed at 7494 from where wave (v) has started.   Minimum 38% projection for wave (v) is at 7603 which is still pending where as 61%-123% projections are placed from   7577-7461.

Thus by seeing the calculations on this chart, we can expect a bounce of 23%-38% from 7603-7506 range without breaking much below 7450. The bounce we can expect till 7800-7890 at least in coming sessions.

Conclusion:

By seeing the wave structure on long term charts, there is no sign of any big crash like 2008 yet. This correction from 9117 may be just a corrective decline before start of new bull rally for new high. Bottom of this decline may be in 7500 -7100 range and more accurate levels can be calculated further when Nifty really reaches near to bottom.

Most of the stock are also suggesting medium term bottom in near term. For investing, focus should be on stocks which yet to start their bigger wave (3) as these stocks can give multi fold returns in quick time during next bull rally, and risk for losing will be less in case we prove wrong in identifying waves.

For very short term, we can see a short term bounce from 7622 -7500 range till 7800 -7890 in coming sessions. Nifty may not go much below 7450 before a reasonable bounce of 23% -38%.

Big traders who can bear the fall of 200 points can buy Nifty in 7622 -7500 range (strategic buy) in very light quantity with stoploss below 7450 for a bounce till 7800 -7890 in coming days. Small traders can wait for the opportunity where we can place small stoploss. Avoid options as India VIX and option premium is very high.

Stoploss for existing shorts must be 7697 and try to book profits in 7622 -7500 range.

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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"