Elliott Wave Analysis and Outlook of Nifty for Start of 2018

| December 31, 2017

Nifty opened mild higher at 10492, registered low 10488 and traded with strength for rest of the day. Nifty bounced by almost 60 points to register day’s high 10538 and closed 52 points up at 10530.

Friday, medium term outlook was positive for one more high above 10552 and same 10439-10369 was good support on downside. Trading strategy was to buy Nifty on decline towards 10439-10399 using stoploss of 10389 but Nifty bounced straightway without decline, so trade was not activated. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 28 Sep 2017 low 9687 and earlier wave counts are explained in my previous analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frames as on 14 Aug 2017

Nifty elliott wave counts on 5 hourly chart

Nifty elliott wave counts on 5 hourly chart

This is 5 hour time bar chart of Nifty covering bounce from low 9687 which I marked as start of new upside impulse. There is no major change in wave counts.

There are confusions and low confidence in counts but casually it seems, wave (1) completed from 9786-9945, (2) completed from 9945-9881, wave (3) may be in completed from 9881-10490, wave (4) may completed at 10033 and wave (5) may be in progress.

Wave (5) already achieved minimum 61% projection placed at 10529 and next 61% projection is placed at 10836 which may or may not be achieved.

Other Possibilities:

  1. If it is wave (1) completed at 10490 and (2) completed at 10033 then wave (3) must achieve minimum 100% projection placed at 10836 in quick time. So, 10836 will be the minimum target in this case.
  2. If the move after earlier high 10490 [end of wave (3)] turns into Irregular Correction then we can witness very fast and furious decline towards 10033 but it is not wise to imagine it in advance, we can be confident only after building up of favorable conditions.

Now, let’s analyze the progress of wave (5) started from 10033 to check its pattern.

Nifty elliott wave counts on 30 minute chart

Nifty elliott wave counts on 30 minute chart

This is 30 minute time bar chart of Nifty covering bounce from 10033 which I am expecting as progress of wave (5) on 5 hour chart. Again there is no major change in wave counts on this chart and pattern is still moving as per expectations.

It seems inner (i) of (5) completed from 10033-10329, wave (ii) may be completed from 10329-10074 as Irregular Correction and wave (iii) may be completed from 10074-10552 or still in progress.

Within wave (iii), it seems last wave 5 is in progress from 10373. Pattern of wave 5 of (iii) is not clear so it is difficult to say if wave 5 already completed or still in progress. But wave 5 already achieved it minimum 38% projection placed at 10513 and next 61% projection is placed at 10601.

23%-38% retracement of progress wave (iii) placed at 10439-10369. So, same 10439-10369 is the best support range and 10369 is the final breakeven point below which we can think of any bigger reversal towards.


The general outlook of Nifty is still positive with 10439-10369 as support range and 10369 as medium term breakeven point but there is still a possibility of short term correction towards 10439-10369 before further bounce. And waves are not giving any closer breakeven point or exact upside target.

Some of my followers/clients are asking about the possibility of further bounce towards 11000 and some are asking about the possibility of crash/good decline very some. I don’t know from where they are getting this information and let me give my idea based on my understating of Elliott Wave Theory.

  1. One condition is favoring minimum bounce for 10836 and above but this bounce must be faster, there should not be any delay now. Any delay can deny the possibility.
  2. There is one possibility of very fast and sharp decline towards 10033 and below (but not below 9687). But this decline will be the great opportunity to buy for quick 500-800 points bounce if it happens.

Both the possibilities are explained in the explanation of 5 hourly charts. And these are just possibilities and we can be confident only after building up of favorable conditions. As of now, 10369 is the breakeven point between these two possibilities.

Generally I don’t give any outlook if I am not confident about it, I am giving these possibilities on request of clients.

Trading Point of View:

Based on the current conditions, Nifty if decline in 10400-10369 range then small risk can be taken to initiate positional longs using stoploss of 10357 (some points below 10369) for minimum target as new life time high in coming days.

I don’t want to sell at present levels because there is no clear sign of reversal yet, and I am not buying at these levels because risk/reward is not good for longs at this point of time. I will wait to decide any short term trade.

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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"

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