Elliott Wave Analysis and Trading Strategy of Nifty for 20 Sep 2017 Onward

| September 19, 2017

Nifty opened higher at 10175 and registered new life time high 10178 but declined just after opening and traded with negative bias for rest of the day. Nifty declined to register day’s low 10129 before closing 5 points down at 10147.

Yesterday, I explained that short term outlook is still bullish for bounce above 10171 may be till 10191-10221 as longs as Nifty is trading above 10119. I suggested 10113 as fresh stoploss for any existing longs (taken in 10050-10035 range). And suggested fresh longs if get in 10130-10119 range with stoploss of 10113 expecting targets above 10171 again.  Nifty registered low 10129, entered in buying range and bounced back. Let’s have a fresh look at latest charts for further scenario.

Today I am covering decline from 02 Aug 2017 high 10137 and earlier waves counts are explained in my latest all time frame analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frames as on 14 Aug 2017

Elliott wave counts of Nifty on hourly chart

Elliott wave counts of Nifty on hourly chart

This is 1 hour time bar chart of Nifty covering decline from all time high 10137 which I am expected as start of medium term correction. This is same hourly chart with explanation which I had explained in my yesterday’s analysis report because there is no major change in wave counts on this chart.

It seems this medium term correction has been completed from 10137-9685 as Simple Zigzag Correction (ABC) as marked on chart and next upside Impulse has been started.

And within the bounce after 9685, there was a repeated overlapping within the move. Overlapping is not simple but continues overlapping since a month. If I assume this bounce after 9685 move as upside Impulse then it is possible only if there are repeated Irregular Corrections. Read the wave counts on charts carefully.

Overall, there is confusion within the pattern till 9988 so we will ignore this move for time being.  But there is sharp rise from 9861 which can give short term clues. So, let’s have a separate look at last bounce started from 9861 to see if we can identify something for short term.

Elliott wave counts of Nifty on 15 minute chart

Elliott wave counts of Nifty on 15 minute chart

This is 15 minutes time bar chart of Nifty covering bounce from 9861. This is same 15 minute chart with explanation which I had explained in my yesterday’s analysis report because there is no major change in wave counts on this chart. The whole bounce also has overlapping but with a sharp bounce at end which is giving some clues.

It seems, wave (1) completed from 9861-9963, Wave (2) may be completed from 9963-9882, wave (3) may be completed from 10131, wave (4) may be completed from 10131-10043 and wave (5) may be in progress.

Normal 38%-61% projection for wave (5) is placed at 10146-10209 whereas Nifty already achieved minimum 10146.

38% retracement of wave (4) is placed at 10035 which is still the medium term breakeven point below which we can think of any medium term reversal.

Now, we need to analyze progress of expected wave (5) separately on lowest time frame chart.

Elliott wave counts of Nifty on 5 minute chart

Elliott wave counts of Nifty on 5 minute chart

This is 5 minute time bar chart of Nifty covering decline from 10043 which I am expecting as start of wave (5).

It seems wave (5) is progressing as Impulse with inner wave (i), (ii), (iii), (iv) is already completed and wave (v) may be started from 10129. Wave (iv) seems “Double Irregular Correction”.

Normal 38%-61% retracement for wave (v) of (5) is placed at 10175-10205 which is the minimum expected target range on upside if wave (iv) is already completed at 10129 today.

And within wave (v), it seems inner wave 1 and 2 is already completed and 3 may be in progress. Wave 2 is again Irregular Correction and wave 3 is just started, so we can expect a gap up or sharp bounce.

38% retracement of wave (iii) is placed at 10119, so 10119 is short term breakeven point below which we can think of any short term reversal and same can be used as stoploss for short term longs.

Conclusion

The short term outlook of Nifty is still bullish for bounce above 10178-10205 which can extend even higher. And we can expect gap up or sharp bounce as some type of wave 3 seems started at the end.

10119 is short term breakeven point and 10035 is medium term breakeven point below which we can think of reversal respectively. 10119 can be used as stoploss for longs.

Trading Point of View:

Short term longs taken today in 10130-10119 range can be hold with same stoploss of 10113 expecting minimum target 10178-10205. Nifty can extend even higher above 10205 so carry the trade with trailing stoploss.

If someone is carrying previous longs taken in 10050-10035 range can also be hold with same stoploss of 10113 (some points below 10119) for same targets 10178-10205 and higher.

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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"