Elliott Wave Analysis and Trading Strategy of Nifty for 13 Aug 2019

| August 13, 2019

Nifty opened higher at 11087, registered low 11062 and bounced further to register day’s high 11181 but failed to sustain at higher levels and declined back till 11096 before closing 77 points up at 11109.

Friday, overall Nifty was in negative zone with 11134 as major upside breakeven point but internal pattern was indicating further bounce towards 11071-11126 and bounce could extend even higher above 11134.

Nifty opened higher and bounced above 11134 till 11181. Later 11175-11195 was low risk selling range with stoploss of 11201 expecting decline towards fresh support 11099-11048 and same was updated through live updates. Nifty declined from 11181 to 11096 we managed to gain 35-70 points. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 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

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [5] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave [iii] of [5] is completed at 11171 and [iv] may be completed at Irregular Correction at 10004 and wave [v] may be in progress. Wave [v] achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave [v] achieved 12103 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.

Elliott Wave counts of Nifty on Daily Chart

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave [v] of [5] on daily chart.  Again there is no major change in wave counts on this chart.

The bounce from 10004-12103 is confirmed as (abc) move because of overlapping of waves after break below 10985. Now we have 02 possibilities on this chart.

  1. The (abc) bounce from 10004-12103 is inner wave [1] of Ending Diagonal Triangle for wave [v]. If this is the case then Nifty can decline towards 10585 to complete wave [2] of ED and later Nifty can bounce slowly with volatility for new high to complete wave [3], [4] and [5] of ED. Possibility of ED will get negated if Nifty breaks below 10004 (end of wave [1]).
  • The (abc) wave completed from 10004-12013 is wave (B) of Irregular Correction. If this is the case then Nifty can decline towards 10004 to complete wave (C) of Irregular Correction followed by new quick Bullish Rally for new high.

Now, we need to focus on pattern of decline after 12103 to calculate further probabilities.

After 12103, it seems wave (a or 1) completed from 12103-11625, wave (b or 2) completed from 11625-11981 as Double Zigzag Correction and wave (c or 3) may be in progress. Pattern of wave (a or 1) is not clear.

Within wave (c or 3), it seems inner wave (i) completed at 11461, (ii) completed at 11706 as Double Zigzag Correction, (iii) completed at 10782  and (iv) or (v) may be in progress.

38% retracement of progress of wave (iii) of (c or 3) is placed at 11134 and same is already broken once. So there are conflicts again, Nifty broken convincingly below major downside breakeven point 11523 and waves also overlapped but upside breakeven point 11134 is also broken once.

So, we need to ignore earlier move for time being and need to concentrate on internal pattern of bounce after 10782 to calculate immediate outlook and important levels.

Elliott Wave Counts of Nifty on 15 Minute Chart

This is 15 minute time bar chart of Nifty covering bounce low 10782 which I am analysing independently.

It seems wave (A or 1) completed from 10782-11018, wave (B or 2) may be completed from 11018-10837 and wave (C or 3) may be in progress. Wave (C or 3) already projected more than 123%.

Within wave (C or 3), there are repeated upside Impulsive followed by downward corrective at start which is making it difficult to indentify its inner wave. I am not sure if wave (C or 3) completed at 11181 or inner wave (iii) of (C or 3) completed at 11181.

23%-38% retracement of progress of wave (C or 3) is placed at 11099-11049. So, 11099-11049 is immediate support and 11049 is immediate downside breakeven point. Nifty is in positive zone as long as trading above 11049, but if breaks below 11049 can result in further decline towards 10837-10782.

We need to observe the pattern of decline in 11099-11049 range to predict further move. Nifty if completes downside corrective pattern in 11099-11049 range then one more bounce above 11181 can be expected otherwise if breaks and trades below 11049 for more than 15 minutes can result in further decline towards 10837-10782.

Internal waves of (C or 3) are marked on next 5 minutes chart. Furthermore, Intraday Selling was advised on Friday in 11175-11195 range with stoploss of 11201 expecting target 11099-11049. Reason for Selling Range, Stoploss and Targets is also explained on the same 5 minutes chart.

Please have a careful look at 5 minutes chart below.

Elliott Wave counts of Nifty on 5 Minute Chart

Conclusion

Overall, Nifty is in medium term negative zone with possibility of further decline towards 10585-10004 but major upside breakeven point 11134 is broken once. Breaking of 11134 is creating confusions, so we need to ignore the overall pattern for time being and need to concentrate on the pattern of bounce after 10782.

For Intraday/short term, 11099-11049 is immediate support and 11049 is immediate downside breakeven point. Nifty is in positive zone as long as trading above 11049, but if breaks below 11049 can result in further decline towards 10837-10782.

We need to observe the pattern of decline in 11099-11049 range to predict further move. Nifty if completes downside corrective pattern in 11099-11049 range then one more bounce above 11181 can be expected otherwise if breaks and trades below 11049 for more than 15 minutes can result in further decline towards 10837-10782.

We need to keep all these conditions in mind while planning next trade.

Trading Points of View:

11099-11049 is immediate support and 11049 is immediate downside breakeven point and we need to observe the pattern of decline in this 11099-11049 range to decide next trade.

Nifty if breaks and stay below 11049 for more than 15 minutes then further trading strategy would be “Selling on Rise” in 11049-11080 range with Stoploss of 11083 expecting decline towards 10837-10782.

But confident buying can be done only if Nifty completes a clear Corrective Pattern in 11099-11049 range and same can be confirmed in market hours only. Updates on the same will be given to “Live Updates Subscribers” during market hours.  

Further, I will update about formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast to all my “Nifty Live Updates” subscribers.

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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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