Elliott Wave Analysis and Updates of Nifty for 29 Sep 2015

| September 28, 2015

Nifty opened gap up today at 7892 and declined sharply to 7831 after opening followed by a range bound consolidation between 7840-7890. But Nifty failed to sustain at higher levels and crashed 100 points from high in last one hour before closing 72 points down at 7795 after registering low of 7787.

We didn’t have any exact trading plan yesterday as we didn’t have exact stoploss for selling but overall I suggested “Selling o Rise” only and we are on the right side till now. Let’s have a look on fresh charts again.

Today, I am covering Nifty wave counts after July 2015 high 8665 as previous counts are same as I explained in my previous Elliott Wave Analysis Report of Nifty. Please read: Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015.

Elliott wave thoery counts on hourly chart

Elliott wave thoery counts on hourly chart

This is hourly time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of downward impulse. There is no change in these counts as it seems,

  • Wave (1) completed from 8655 -8321
  • Wave (2) completed from 8321 – 8621
  • Wave (3) completed from 8621 – 7541
  • Wave (4) completed at 8055 as ‘abc’ which retraced more than 38%.
  • Wave (5) needs to go below 7541 at least to avoid 5th failure whereas 61% projection is placed at 7366 which may or may not be achieved.

So, we can expect 7541 at least in coming days before any reasonable move upside.

Now let’s have a look at decline from 8055 to analyze progress of wave (5) started from 8055.

Elliott wave thoery counts on 15 minutes chart

Elliott wave thoery counts on 15 minutes chart

This is 15 minutes time bar chart of Nifty covering decline after 18 Sep 2015 high 8055. It seems inner wave (1 or a) is completed from 8055 -7910, (2 or b) completed from 7910 -8021 as simple zigzag and (3 or c) is completed from 8021 -7723.

Let me explain why I have shown both the possibilities of (abc) and (123):

  1. Minimum limit for bigger wave (5) is 7541 but it already completed its inner wave (3) at 7723 and Nifty is still 340 points far from 7541. So, wave 5 needs to be highly extended, more than 100% to achieve 7541 which is possible but not normal.
  1. If I take wave (3) complete at 7723 then wave (4) retraced more than 50% which is again not normal. Normally we see 23 -38% retracement for wave (4). So we need to be cautious. And on the other hand, rise from 7723 to 7894 doesn’t look like a corrective wave.

So, there are possibilities for bigger wave (5) (started from 8055 on first chart) to progress as Ending Diagonal (ED) and 8055 -7723 may be inner wave (1) as ‘abc’. Bigger wave (1) (from 8655 -8321 on first chart) was clean impulse so there also are possibilities for wave (5) to be Ending Diagonal.  Or there may be something else which I am not able to identify yet.

Wave (2) is often 61% or above in Ending Diagonal and can go till start of inner wave (c of 1). 61% retracement of wave (1) is placed at 7928 and inner wave (c of 1) is started from 8021.

Let’s try to mark wave counts on decline after 24 Sep high 7894:

Elliott wave thoery counts on 5 minutes chart

Elliott wave thoery counts on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering move after 24 Sep 2015 high 7894. The pattern formed at top looks like a 3-3-5 Flat Correction if we look casually. So, we should not ignore the possibility of bounce above 7894 again. Break below 7722 may negate this possibility.

Conclusion:

Possibilities for Nifty to break below 7541 are still there in coming days/weeks to complete wave (5) but this wave (5) have both the possibilities to progress as “Ending Dagonal” or “Clean Impulse”.

Nifty can decline from 7928–8021 range if wave (5) going to be ED. Or Nifty can decline without breaking above 7911 if wave (5) is going to be a clean Impulse. But Nifty should not break above 8055 and suggesting decline in both the cases.

So, medium term Strategy should be “Selling on Rise” only until we see 7541 or any change in current wave’s pattern. Any change in wave’s pattern, trailing stoploss for sell and inner levels will be updated in daily Elliott Wave Analysis reports of Nifty. And conditions are good for hedge trade with more weight on sell side until we get an exact stoploss for selling.

My personal Hedge Trade:

I shared my personal “Hedge Trade” on my face book group today and posting screenshot below. Link to my facebook group is https://www.facebook.com/groups/sweeglu/

FB Post..

Even today only Nifty Oct Future declined from 7900 to 7820 and Nifty 8300 Oct Cal decline from 33 to 26. Overall it was a profit of net 45 points and still some downside is possible which will increase the profit.

We don’t needs 100% accurate conditions to get profit from market but if even we have 02 possibilities we can take profits   with calculated trading strategy. Trading is an art and there is always a trading strategy for every market conditions. You just need to keep patience and control your greed.

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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"