Elliott Wave Analysis and Trading Strategy of Nifty for 28 Feb 2018

| February 27, 2018

Nifty opened higher at 10615, registered high 10631 but failed to sustain at higher levels and traded with negative bias for rest of the day. Nifty declined by more than 90 points from day’s high to register day’s low 10537 and closed 28 points down at 10554.

Yesterday, the overall wave counts were suggesting one more decline for low below 10276, most probably from 10637-10829 range. For short term, bounce towards 10663-10748 was expected with 10532-10496 as short term support and 10496 as breakeven point and stoploss for longs.

Trading strategy was buying Nifty in support range near breakeven point (in 10520-10496 range as per yesterday’s high) with stoploss some points below breakeven. But support range was changed to 10562-10520 after registering fresh high 10631 and breakeven point changed to 10520. Nifty entered in support range near breakeven point. Let’s have a fresh look at latest charts for further scenario.

This analysis report is covering bounce from low 6825 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 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 from 6825 which I am expecting as start of wave {[v] of [3] of (iii)} of larger (3) on monthly chart. This is the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

It seems inner wave 1 of [v] completed from 6825-8968, 2 completed at 7893 and wave 3 may be in progress.

And within wave 3 started from 7893, there is small but identifiable correction from 10137-9687, so 10137 can be inner wave (iii) of 3 followed by (abc) correction from 10137-9687. But the later bounce from 9687-11171 is also 3 waves move followed by sharp decline. So, there are 02 possibilities: –

  1. Either wave (iv) of 3 completed at 9687 and wave (v) in progress
  2. Or wave (iv) is still in progress as Irregular Correction with wave (A) completed from 10137-9687, Irregular (B) completed from 9687-11171 and wave (C) in progress from 11171.

This chart is showing two possibilities, so need concentrate on decline from 11171 to calculate further move until we get clarity on daily chart.

Elliott wave counts of nifty on hourly chart

Elliott wave counts of nifty on hourly chart

This is hourly time bar chart of Nifty covering decline from all time high 11171 which is the start of downward impulse.

It seems an Impulse is already completed from 11171-10276 with extended wave (5) as marked on chart. This downward Impulse can be wave (A) of Simple Zigzag or wave (C) of Irregular Correction.

If this Impulse is wave (A) then normal 38%-61% retracement for wave (B) is placed at 10617-10829. So, 10617-10829 is the expected upside range in this case whereas 10617 is already achieved.

The bounce from 10276 after a sharp downward impulse is slower which is indicating this bounce as some sort of corrective pattern and warning cautions of one more decline for low below 10276.

So, let’s analyze the bounce started from 10267 separately on lowest possible time frame chart to check its pattern.

Elliott wave counts of nifty on 30 minute chart

Elliott wave counts of nifty on 30 minute chart

This is 30 minute time bar chart of Nifty covering bounce from 10276 which I had marked as end of wave (A) or (C).

It seems wave (a or 1) completed from 10276-10637, wave (b or 2) may be completed from 10637-10302 as Double Zigzag Correction and wave (c or 3) may be in progress. Normal 100%-123% projection for wave (c or 3) is placed at 10663-10748 which is the normal range for completion of wave (c or 3).

Within wave (c or 3), it seems inner wave (i) completed at 10429, (ii) completed at 10341 and wave (iii) may be completed at 10631 or still in progress. Normal 23%-38% retracement of progress of wave (iii) is placed at 10562-10520 which is the fresh support range on downside and Nifty already achieved 10537.

So, 10520 is immediate breakeven point below which we can expect further decline towards 10276 and same can be used as stoploss for longs.

If wave (iii) already completed at 10631 and (iv) completed at 10537 then minimum 38%-61%projection for wave (v) is placed at 10662-10740. So, 10662-10740 is the minimum target range on upside in this case.

Conclusion

There is no major change in overall wave counts and outlook, overall personality of the bounce from low 10276 is not suggesting any bigger reversal for new life time high and possibility of one more decline for low below 10276 is still there in coming days, and decline may start from 10637-10829 range. Nifty needs to bounce very sharply from here without any delay for bigger upside reversal.

For very short term, bounce towards 10662-10740 is expected and 10562-10520 is the range where Nifty can find short term support, Nifty already corrected till 10537. 10520 is the breakeven point below which we can expect further decline towards 10276-10083 and same can be used as stoploss for longs.

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

Trading Points of View:

According to conditions on charts, trading strategy would be to holding short term longs with stoploss or Buying Nifty in immediate support range near breakeven point with stoploss some points below breakeven point.

Those who bought Nifty today in support range can hold the same with stoploss of 10509 (some points below 10520) expecting targets 10662-10740 is coming days. Keep trailing stoploss once Nifty achieves 10637.

Fresh buying can also be done if get Nifty is 10540-10520 range using stoploss of 10509 expecting same targets 10662-10740 in coming days.

BANK NIFTY ANALYSIS

“Elliott Wave Analysis Reports of Bank Nifty” with “Bank Nifty Weekly Options Trading Strategies” Daily is also provided by one of my personally trained student Vinod Sharma on his website http://www.ewanalyst.com/ Links to some of his analysis Reports are: –

Tags: ,

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"