Nifty opened huge gap up on Friday at 8053 followed by small decline till 8323 but bounced again above opening price to register day’s high of 8091 where it consolidated for couple of hours. Nifty consolidated in 8060-8080 range for couple of hours followed by a sharp decline of about 130 points before closing 53 points up at 8001 after giving low of 7962.
Nifty reacted almost perfect as per analysis on Friday. Minimum 8037 was expected which was 100% projection for (c) where we needed to see if impulse is completed. Nifty opened huge gap up well above 100% projection and reached near 123% at 8098 to complete impulse.
8037-8098 (100-123% projection of wave C) was range of cautions for decline. A clean impulse completed at 8091 and Nifty fell more than 100 points from danger zone as expected.
Nifty didn’t give chance to buy for minimum target 8037 with stoploss 7937 as it opened well above minimum target but there was good opportunity to sell with small stop loss after seeing a completion of impulse at higher levels near 8098 (explained later). Let’s have a look on latest charts.
Read my last Elliott Wave Analysis Report of Nifty: Nifty Elliott Wave Analysis and Outlook for 28 Aug 2015
This is 30 minutes time bar chart of Nifty covering move after July 2015 high 8655. Again, there is no change in wave counts in this chart as the move from 8655-8321-8621 can be waves (A or 1) or (B or 2) and (C or 3) may be started from 8621.
Within wave (C or 3), wave (1), (2) and (3) are completed as shown on charts and there are possibilities for wave 4 to be completed at 8091 on Friday. Though, wave (4) bounced well above 38% projection which was placed at 7998.
Now, we need to see the move from low 7669 to identify if this bounce resembles a corrective pattern as wave (4) or not.
This is 5 minutes time bar chart of Nifty covering move after 25 Aug low of 7669 which I am expecting as completion of wave (3) and start of wave (4).
It seems that an impulse (a) may be completed at 7929 followed by corrective (b) completed at 7777 as simple zigzag which retraced wave (a) by 61% and wave (c) is in progress from 7777. Wave (c) achieved almost 123% projection after reaching near 8098. Nifty registered the high of 8091 on Friday followed by a good decline.
If we look at personality of waves then, 2nd impulse (from 7777-8091) took more time to reach 100% projection of 1st impulse (from 7669-7929). 2nd impulse took more than double time of 1st impulse till now but still trading below 100% projection after achieving 123% (try to see move marked within light grey boxes) . So, inner waves of move from 7669-8091 carrying the personalities of “abc” rather than 123 as wave (3) is often faster than (1).
Nifty need to bounce faster above 161% projection of (c) from here to regain the personality of impulsive upside otherwise it may be corrective wave “abc” as (4) and Nifty can decline below 7669 to complete wave (5). If it is wave (3) completed at 8091 rather than (c) then we can see more 180-250 points rise from current levels.
Let me show you the follow up of move after Thursday’s close which we identifies as formation of Leading Diagonal at top followed by 3-3-5 Flat Correction as wave (1) and (2).
This is again 5 minutes time bar chart of Nifty covering move of last 2 sessions. On Thursday I identified a formation of Leading Diagonal at top which is always wave (1) followed by 3-3-5 Flat Correction as wave (2) and expected waves (3), (4) and (5) upwards to complete impulse. And expected at least 110-140 points upside and I mentioned in chapter “Calculation and Personalities of waves” of my book that, “We can always expect a whole impulse minimum 3 times of its inner wave (1)”. Wave (1) was of about 40 points here, so we could expect whole impulse of minimum 120 points and no limit for maximum.
Nifty opened gap up at 8053 to complete wave (3) as gaps and steep bars are always wave (3) followed by 23-38% decline till 8023 to complete wave (4) and bounce till 8091 to complete wave (5) and completion of impulse from where we expected a decline of minimum 100 points. Anyone having reasonable knowledge of EWT could have made good low risk trade there.
Nifty corrected about 130 points from 8091-7962 and move seems impulsive followed by Irregular Correction from 7962-8027 as shown on chart. The whole pattern may be inner wave (1) and (2) where (2) retraced more than 38% of wave (1) and 61% is placed at 8041.
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Note: I just posted charts and explanation of probable wave counts but not posting conclusion, stop loss and trading strategy to protect the interest of my paid subscribers as I provide same reports to them. Any one having reasonable knowledge of Elliott wave theory can easily make trading decision based on these chart but those are unable to understand wave count must avoid trading based on these charts.