Elliott Wave Analysis of Nifty for 06 Aug 2018 Onward

| August 4, 2018

Nifty opened higher at 11297, registered low 11294 and traded with strength for rest of the day. Nifty bounced by more than 120 points to register day’s high 11368 and closed 116 points up at 11360.

Yesterday, Nifty was in positive zone with 11216 as immediate breakeven point on downside and one more bounce for new high was expected in coming days. 11286 was immediate breakeven point on upside and Nifty was expected to bounce towards 11372-11390 if trades above 11286 for 15 minutes.

Traders were advised to plan their own trade based on above mentioned conditions. Nifty broke 11286 at opening only and bounced further to register day’s high 11368 after some consolidation. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 9951 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 analysis of nifty on daily chart

Elliott wave analysis of nifty on daily chart

This is daily time bar chart of Nifty covering bounce after low 9951 which I marked as start of wave ‘v’ on daily chart in my last “All Time Frames” Report. There is no change in wave counts on this chart.

It seems inner wave (1) completed from 9951-10229, wave (2) completed from 10229-10111 as Irregular Correction, wave (3) may be completed at 10929, wave (4) may be completed at 10417 as Simple Zigzag and wave (5) may be in progress. [Wave (4) retraced deeper than 38%).

Wave (5) already achieved 61% projection after breaking above 11022 and next 100% projection is placed at 11395 which may or may not be achieved, so we need to concentrate on its pattern now onward.

Note: – Wave (5) almost achieved 100% projection but pattern is not completed. So, may be the wave I am expecting as wave (5) is actually wave (3). Let’s wait for confirmation and we will concentrate on inner waves till then.

So, let’s analyze the progress of expected wave (5) started from 10417 on lowest possible time frame chart to check its pattern closely.

Elliott wave analysis of nifty on 5 hourly chart

Elliott wave analysis of nifty on 5 hourly chart

This is 5 hourly time bar chart of Nifty covering bounce from 10417 which I have marked as start of wave (5) on daily chart. Again, there is no change in wave counts on this chart.

It seems inner wave [1] of (5) completed from 10417-10893 (pattern not clear), [2] completed at 10557 as Double Zigzag correction and wave [3] may be in progress. Wave [3] already achieved 161% projection.

Within wave [3], it seems inner wave [i], [ii], [iii], [iv] is completed and [v] may be in progress from 10925. Wave [v] of [3] achieved normal 61% projection after break above 11246 and next 100% projection is placed at 10446 which may or may not be achieved. Nifty registered high 11390 till now.

23%-38% retracement of progress of wave [3] is placed at 11193-11071 which is medium term support and 11071 is medium term breakeven point. Any bigger reversal can be expected after break below 11071 only and Nifty declined till 11234 till now.

Now, let’s have a close look at progress of wave [v] of [3] on separate chart to check its pattern.

Elliott wave analysis of nifty on 30 minutes chart

Elliott wave analysis of nifty on 30 minutes chart

This is 30 minute time bar chart of Nifty covering bounce from 10925 which I marked as start of wave [v] of [3] on 5 hourly chart.

Inner wave (1) of [3] may be completed from 10925-11076 (pattern is not clear), wave (2) may be completed from 11076-10935 and wave (3) may be completed from 10935-11390, wave (4) may be completed from 11390-11234 as simple zigzag and wave (5) may be in progress.

Minimum 38%-61% projection for wave (5) is placed at 11411-11521 which is the minimum target range for completion of wave (5) if wave (4) already completed at 11234.

38% retracement of progress of wave (3) is placed at 11216. So, 11216 is still the immediate breakeven point downside. This breakeven point will get negated after Nifty achieving 11411 (minimum 38% projection for wave (5).

Let’s have closer look at progress of wave (5) on lowest possible time frame.

Elliott wave analysis of nifty on 5 minutes chart

Elliott wave analysis of nifty on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering bounce from 11234 which I marked as start of wave (5) of [v] of 30 minutes chart.

There is a sharp move from 11234-11334 followed by small correction and then slow bounce again. So, the personality of move is indicating that inner wave (iii) of (5) may be completed at 11334, (iv) may be completed at 11315 and wave (v) may be in progress. Wave (i) and (ii) is negligible.

Wave (v) already achieved minimum 38% projection after break above 11353 and next 61%-100% projection is placed at 11376-11415 which may or may not be achieved.

Contradiction: – The normal projection of inner waves (v) of (5) is falling below the minimum projection of (5). So, may be inner wave (i) of (5) completed at 11334 rather than (iii), but very shallow retracement from 11334-11315 is not normal for wave (ii).

So, we will assume 38% retracement of progress of whole wave (5) as immediate breakeven point on downside and same is placed at 11316. The next move will clear the pattern because Nifty must bounce sharply if it is wave (iii) of (5) in progress from 11315.

Conclusion

For long/medium term,

Same as I explained in my all time frames report, Outlook for medium/long term is still bullish because Nifty is within the middle of wave (3) on largest wave cycle and there is Irregular Correction at top. Nifty has long way to go with occasional corrections (maximum 23%-38% corrections with 9918 as breakeven point and 8968 as pattern negation point). Nifty may not break below 8968 in any case in coming years before competition of larger wave cycle.  We need to revise whole wave counts if Nifty ever broke below 8968.

For Short Term,

Nifty is still in positive zone and has possibility to bounce further towards 11411-11521 and 11216 is the short term breakeven point on downside. 11193-11071 is next support after 11216 and any bigger reversal can be expected after break below 11071 only.

11316 is immediate breakeven point on downside and same can be used as stoploss for existing longs. 11316 is just a stoploss for existing longs and not a support to buy or breakeven point for sell.

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

Trading Points of View:

According to fresh conditions on charts: –

If some one bought Nifty on Friday and still holding can book part/full profit as Nifty is nearer to minimum targets 11372 and rest positions can be hold with trailing stoploss of 11313 (below 11316). There is possibility of further bounce towards 11411-11521 and Nifty must bounce sharply, otherwise any consolidation at lower levels can result in further fall.

These are low risk trading conditions I can suggest right now. Otherwise traders can plan their own trade based on the conditions explained above.

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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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