Elliott Wave Analysis and Trading Strategies of Nifty for 17 April 2017

| April 15, 2017

Nifty opened flat at 9202 but declined sharply just after opening and traded with negative bias of rest of the day. Nifty decline by more than 50 points to register day’s low 9144 before closing 52 points down at 9150.

Friday, a bounce above 9273 was expected without breaking below 9131 and suggested to buy Nifty 9200 April call in 9200-9131 range with stoploss of 9130 expecting minimum target above 9273. Nifty traded in 9144-9200 range for whole day and closed at 9150. Let’s have a fresh look at latest chart for further scenario.

Today I am covering bounce from 03 Mar 2017 low 8860 and earlier wave counts are explained in my previous analysis report Elliott Wave Analysis and Outlook of Nifty for 03 April 2017 Onward

Elliott Wave counts of Nifty for 17 April 2017

Elliott Wave counts of Nifty for 17 April 2017

This is hourly time bar chart of Nifty covering bounce from 8860 which I am expecting as start of new impulse on 2nd daily chart on all time frames report.

It seems wave (i), (ii), (iii), (iv) is completed and wave (v) is started from 9019. Wave (iv) retraced deeper than 38%. Wave (v) already achieved 61% projection after break above 9240 and is in extended zone (high made 9273) and next 100% projection is placed at 9377 which may or may not be achieved.

Expected wave (v) is also progressing as an impulse, so let’s have a closer look at progress of wave (v) started from 9019 on separate 30 minutes chart to check if the pattern is completed or not.

Elliott Wave counts of Nifty for 17 April 2017

Elliott Wave counts of Nifty for 17 April 2017

This is 30 minute time bar chart of Nifty covering bounce from 9019 which I am expecting as progress of wave (v) on previous 30 minute chart.

It seems, wave (1) may be completed from 9019-9131 (inner wave (v) is highly extended), wave (2) may be completed from 9131-9024 as Irregular Correction, wave (3) may be completed from 9024-9273 and  wave (4) may be completed at 9144 as complex correction or still in progress.

Wave (3) retraced more than 38% (more than normal) but the pattern of decline have repeated overlapping of waves and still seems corrective (may be Double or Triple Zigzag). So, still there are possibilities for wave (4) and maximum limit for wave (4) is 9131 [end of wave (1)].

So, if it is wave (4) in progress from 9273 then wave (5) needs to bounce above 9273 again. 38%-61% projection for wave (5) [calculated from 9144) is placed at 9241-9300, so minimum targets for wave (5) will be 7293-9300 in this case.

Let’s have a deeper look at progress of expected wave (4) on 15 minutes chart.

Elliott Wave counts of Nifty for 17 April 2017

Elliott Wave counts of Nifty for 17 April 2017

This is 15 minutes time bar chart of Nifty covering decline from all time high 9273.

The pattern of decline is not completely clear but there is repeated overlapping within the decline. So, this decline with overlapping of wave can either be a Complex Correction (most probably Double Zigzag as marked on chart) OR it can be repeated downward impulses followed by upward correctives (rare possibility).

So, there is a possibility of either a good bounce (if the decline from 9273 is Complex Correction) Or a very sharply and steep decline (If the waves within decline from 9273 are repeated downward impulses followed by upward correctives).

Most of the conditions are favouring the pattern of decline from 9273 as Complex Correction at this point of time.

Conclusion:

Nifty is consolidating near all time high since last week with gradually decline but with a very complex pattern. There is repeated overlapping of wave within the decline which made it difficult to identify exact pattern and our couple of trades went wrong. But the overall structure is indicating either a good bounce or a very sharp decline soon.

Generally, most of the conditions are favouring bounce above 9273 again because possibility of wave (4) on 30 minutes chart is not negated yet as still there is possibility of double zigzag. Maximum limit for wave (4) is 9131 and any reversal can be seen only if Nifty breaks below 9131.

So, our trades must be either hedged or less risky in such conditions.

Trading Point of View:

Same as I had explained in my last analysis report, most of conditions are still in favour of a bounce above 9273 as long as Nifty is above 9131 and there is also a danger of very sharp decline (rare possibility). So, for safe trades,

  1. Nifty 9200 April Calls if bought on Friday can be hold with same stoploss of 9130 expecting targets 9273-9300. Exit this trade if Nifty even touches 9130.
  1. For fresh trade, Nifty can be bought at current levels with strict stoploss of 9130 expecting same targets 9273-9300.

Positional Hedges Trade:

  1. Nifty even if touch 9130 then buy Nifty 9400 May Call and Nifty 8900 May put in equal quantity and hold for further updates. Trade in May Options only and avoid April options.

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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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