Elliott Wave analysis of Nifty for 12 Nov 2014

| November 11, 2014

Nifty is still holding tight and consolidating at top as I mentioned yesterday. Any script should not hold for so long after completion of highly extended 5th wave. And if it was not 5th then only option is wave 3 and if it is wave 3 then a 5th must be upside. Range bound consolidation with volatility and overlapping of waves still creating hesitations.

This analysis report is just for study purpose and approach to identify complex pattern. Yesterday I expected a upside move of at least 30-40 points from closing levels and Nifty shown that move but still closed today within range without showing any clear signal. Let’s see on chart:

NIfty Elliott Wave Analysis for 12 Nov

NIfty Elliott Wave Analysis for 12 Nov

This is 5 minutes time bar chart of Nifty showing only last 2 days of move.

Nifty is forming (ABC) like wave after bouncing from recent low 8290. The move from 8290 to 8383 doesn’t looks like a clean impulse but looks like (ABC). The whole pattern is seems like I plotted on chart.

This pattern is indicating nifty to touch 8393 to 8413 at least without breaking below 8304. Possibilities of higher levels are also there but let us see how Nifty reacts tomorrow. The weakness can only be seen below 8304 now.

Nifty should not go below 8304 from present levels to maintain short term strength. And if Nifty managed to show new high, it should not break below 8322 after hitting new high. The picture may be cleared tomorrow.

After seeing the consolidation of 5 sessions, I bough Nifty Futures today at 8357 when Nifty spot was around 8325 after seeing more than 61% correction of previous wave with 8304 Spot as stoploss. I am still holding that long position and stoploss modified to 8351 spot {top of wave (i)}. I will exit my longs tomorrow with small profit if Nifty even touched 8351 spot. I bough Nifty because there is no sign of weakness yet and I also seen 61% correction of previous wave. Holding with stoploss well above my cost and will see tomorrow if I need to hold or exit.

I am sharing my trade just to show that you can always take positions in any trend when you are using EW analysis. Because Elliott Wave Principles gives you fix stoploss. I bought because there was low risk of just 20 points, charts were not showing weakness and majority is waiting for fall. But market always goes against majority. I took low risk with very small stoploss of 20 points and now I am secured with my position unless Nifty open 40 points gap down tomorrow. Now, I have time to decide if I have to hold or exit after seeing tomorrows move. May be this trade give me handsome profit or just small profit.  You can’t make money in stock market unless you take risk, but risk must be calculated with strict discipline.

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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"

Comments (13)

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  1. Deepak Kumar says:

    Nifty Sown the expected levels of 8393, some more upside is possible. Possibilities of Ending Diagonal is arising seeing the personality of waves.

  2. Deepak Kumar says:

    Aaditya,

    There are three possibilities:
    Either move from 8305 to 8378 is just inner wave (i) of (3) and decline till 8322 is (ii) of (3).. it shows much higher levels.
    2nd, As previous move from 8290 to 8383 looks like abc, may be the whole wave is taking shape of ED again 33333. 8290 to 8383 wave 1 (abc) 8383 t0 8304 wave 2 (abc) and next 8304 to 8378 wave (a) of (3), 8378 to 8322 wave (b) of (3) and last upside from 8322 is last wave (c) of (3) that has to go above new high and retrace back to the thin red line (slope).
    Third, is not clear.

    I am placing stop loss 8351 spot because, I am assuming small wave (i) and (ii) completed and (iii) in progress. Now after completion of (iii), wave (iv) should not break below the top of (i) that is 8353. And will see tomorrows move for next decision.

  3. Aaditya Rana says:

    dear Admin,
    there is one more doubt in my mind about nifty move from 8322/red(2) and it is purely academic.
    Since 3 rd wave are meant to be very fast and furious , is it possible that third wave started from 8305 went till 8378 and did not break 8383 and even worse came back to 8322.
    i think one really need to keep a Sl of 8351 as this move is still not clear.

  4. Aaditya Rana says:

    dear admin, in chart for 12-nov-14 , it has been shown that move from 8290 is abc move till 8383 or red (1) and in move from red (2), you are counting it as red (i) or blue(a) and red(ii) or blue (b).
    I want to know that if nifty later on moves in such a way that move marked as red (i) and red(ii) becomes valid then how are u going to change the marking of abc till red (1), since the 5 waves from 8290 till 8383 are overlapping.
    would it mean that it was a LD in wave 1 from 8290 to 8383 and we have meaningful upside left ?

  5. Aaditya Rana says:

    Dear admin, what is the over picture till here on the bigger chart for move from 7220 in ED. how much below is nifty from upper line of that wedge?
    Is there any Chance of nifty forming another ED from 7422 ?

    • Deepak Kumar says:

      You can see in my previous reports for details. Till now I am assuming this move from 7724 as wave A of 5 of Ending Diagonal started from 7218. May be it is not ED so concentrating on every time frame.

  6. Mahesh says:

    Hi Deepak, We are still in 4th wave. 5th has not started. see my chart.
    We have formed WXY so far. Y is in progress. 8390-8400 is the maximum height we can go tommorow. we will go back to 8320-8290 in c of Y. After that market will decide if 4 completes with WXY (double 3) or goes onto form WXYXZ (triple 3). 5th wave will begin after that.

    • Deepak Kumar says:

      Dear Mahesh,

      As I already said, I know only classic Elliott wave Theory and use only 1,2,3,4,5 and a,b,c.. I can’t understand and explain about WXY. I am not completely sure about any move and waiting for any clear indication. Just holding my longs with 8351 spot stop loss for tomorrow till now.

      • Mahesh says:

        WXY is a classic Elliot pattern called the double 3. It is also known as abcxabc. WXYXZ is triple 3 or abcxabcxabc. Triangle is also a classic Elliot pattern and one of R.N Elliot’s favorite pattern (see his book ‘secrets of the universe’).

        • Deepak Kumar says:

          Mahesh,

          Yes, I know (abc-x-abc) and (abc-x-abc-x-abc) and I call it simply “complex correction”, Double Zigzag or triple zigzag. But every correction, every pattern have separate personality and criteria that helps you to identify it, we should not just assume it without strong reason.
          And I read almost 37 different books on Elliott Wave Theory and myself practicing Elliott Wave Principles since 2011 everyday in my daily trading in every time format. I researched EWT by my owm and my experience say, Every market follows same Elliott’s patterns but aggressiveness, behavior and personality of waves is changed. Elliott discovered this awesome pattern in 1932-1940 on markets of that time, market still follows same cycles but behavior is changed. Elliott Waves Principles and patterns is just the base, identifying these pattern on chart is your knowledge and analyzing and predicting next moves is your experience and reasoning capability.

          • Mahesh says:

            Thats some good work deepak. I have so far read 4 books and on the lookout for more material like books and videos Etc. Neely’s book is by far the best.

          • Deepak Kumar says:

            I don’t know Neely’s book. And I never be interested in other modified or alternate theories like Neo, wolf, harmonics etc. I just read old books on Elliott’s research written before 1990 to understand the basic pattern. I researched myself and combined Fibonacci Ratios with waves and finally concluded that analysts just tried to make it complex by trying alternate methods. Otherwise Application of Elliott Wave Principles on charts is just simple and you don’t need any other tool or indicator for help unless Volume some time. It is the personality of waves and Fibonacci Calculations that hints everything well in advance.

            Happy to hear that you also believes and trying to explore EWT.