Elliott Wave Analysis and Trading Strategy for 14 Sep 2018

| September 14, 2018

Nifty opened higher at 11340 and declined after opening to register day’s low 11250 but bounced back by about 130 points from day’s low to register day’s high 11380 and closed 82 points up at 11369.

Yesterday, Nifty was expected to bounce towards 11603 in coming days with 11300-11236 as immediate support and 11236-11226 was maximum limit for this downside.

Trading strategy was buying on dips expecting bounce towards 11603 in coming days. Small traders were advised to buy if Nifty trades above opening price at 9:31 AM and experienced were advised to manage longs using stoploss below 11226.

Nifty was trading below opening price at 9:31 AM and declined to register low 11250, it was low risk buying opportunity as Nifty was very near to maximum limit 11236-11226. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 9951 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

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 bounce after low 9951 which I marked as start of wave ‘v’ on daily chart in my last “All Time Frames” Report.

It seems, wave (1) completed from 9951-10929, (2) may be completed from 10929-10417 and wave (3) may be in progress from 10417.

And within wave (3), it seems inner wave (i) of (3) completed from 10417-10893 (pattern not clear), (ii) completed at 10557 as Double Zigzag correction, wave (iii) may be completed at 11760 and wave (iv) may be progress.

38% retracement of progress of wave (iii) is placed at 11300 and is already broken, so we need to be cautious about further fall. Means, we should not be confident about bounce for new high and need to progress step by step.

Now, we need to analyze the pattern of decline started from 11760 to check its pattern.

Elliott Wave counts of Nifty on 30 Minutes Chart

Elliott Wave counts of Nifty on 30 Minutes Chart

This is 30 minutes time bar chart of Nifty covering decline after 11760 which I am expecting as start of wave (iv) of (3) on daily chart.

The pattern of this decline seems impulsive with inner wave (1) completed from 11760-11639, corrective bounce from 11639-11751 can be wave (2), wave (3) may be completed from 11751-11393, wave (4) may be completed from 11393-11603 and wave (5) may be completed at 11250 or still in progress.

Wave (5) already achieved its normal 61% projection after break below 11376 and is an extended wave. Next 100% projection is placed at 11236 which is a rare case. Nifty can bounce sharply towards 11603 [start of extended wave (5)] after completion of wave (5) if the counts I am marking are correct because extended wave 5 often retrace 100% with speed.

This downward Impulse can be wave (A) of (iv) or (C) of any Irregular Correction. And 38%-61% retracement of progress of this impulse is placed at 11444-11565. Now, let’s have a separate look at progress bounce started from 11250.

Elliott wave counts of Nifty on 5 minutes chart

Elliott wave counts of Nifty on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering bounce from 11250 which I am analyzing independently because earlier wave is not completely clear.

It seems wave [1], [2] completed and [3] may be in progress. Within wave [3], it seems inner wave [i], [ii], [iii] is completed and [iv] and [v] may be in progress.

23%-38% retracement of this whole move is placed at 11349-11330. So, 11349-11330 is immediate support range and 11330 is immediate breakeven point on downside. Same 11330 can also be used as stoploss for longs. 

Conclusion

A small or big bounce was expected from 11300-11236 range with 11236-11226 as maximum limit on downside and Nifty bounce by 130 points after registering low 11250.

Now, we can’t say confidently if Nifty is going to bounce for new high because medium term breakeven point 11300 was broken. So, we need to progress step by step using trailing stoploss and 11444-11565-11603 is achievable targets range based on Fibonacci Retracements.

11349-11330 is immediate support and 11330 is immediate breakeven point on downside. And same 11330 can be used as stoploss for longs.

We need to keep all these conditions in mind while planning/managing trades.

Trading Points of View:

According to fresh conditions on charts: –

Nifty bounced from support 11300-11236 range but we don’t have idea about exact upside targets. We just have 11444-11565-11603 as estimated target range based on Fibonacci Retracements and Personality of waves. So, short term trading strategy must be “buying on dips” if get support range using stoploss some points below breakeven point. So,

Those who are already holding longs can use 11323 (some points below breakeven 11330) as stoploss for existing longs. Multi lot traders can book part profit in 11380-11444 range.

For fresh trade, any decline towards 11349-11330 can be used as Intraday/very short term buying opportunity using exact stoploss of 11323 expecting 11380-11444 as minimum upside target range which further can extend towards 11565-11603. Modify stoploss to cost after achieving 11380 and manage trade with trailing stoploss. Hold the trade for next day only if Nifty closes near high of the day. This trade will not be valid if Nifty achieves 11380 before 11349.

These are low risk trading strategies I can suggest right now. Otherwise traders can plan their own trades based on the conditions explained above.

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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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