Elliott Wave Analysis of Nifty for All time Frames Dated 18 Oct 2014

| October 19, 2014

This Elliott wave analysis report covered EW analysis of Nifty for Long Term, Medium Term, Short Term and Very Short Term and I prepared it for the purpose of training. I plotted fractals and labeled counts on different charts but didn’t explain in details. I just plotted charts and advised which section or chapter of my book “Practical Application of Elliott’s Wave Principles by Deepak Kumar” you should refer to understand the fractals.

This report mainly focused on “Elliott’s Wave Cycles” shown on long term charts and “Personality of waves” but also have many patterns to learn. Just go step by step and try to understand the Wave’s Cycles of Nifty.

So let me start from Historical chart of Nifty:

Long Tern Elliott Wave Analysis of Nifty

Long Tern Elliott Wave Analysis of Nifty

Chart 1 is monthly chart of Nifty covering period from 2002 to till date.

It shows Nifty completed 1 full cycle of 5 waves at 6357 and followed by a bigger correction of 61-70% till 2253. Thus completed biggest wave 1 and 2 in 2009 and started bigger wave 3 from 2253.

  • Lower Degree wave 1 of biggest wave 3 (13) completed at 6338 in 2011
  • Lower Degree wave 2 of biggest wave 3 (23) completed at 4531 that corrected just more than 38% of (1-3)
  • There after lowest degree wave (1) and (2) and extreme lowest degree wave (i) and (ii) started.
  • The last wave marked in Blue Box is extreme lowest degree wave (iii) in progress which is steepest of all. And at the top of proceeding wave (iii), looks like a formation of Diagonal Triangle. Observation of Diagonal Triangle on Monthly chart will help to identify latest short term move.

Just refer the chapter “Wave’s Cycles” and “Personalities and Calculations of Waves” to understand this chart.

Now let us proceed to weekly chart for the closer look after wave (2) marked on (Chart 1) from 5118. Next Page Chart (2)…

Medium Tern Elliott Wave Analysis of Nifty

Medium Tern Elliott Wave Analysis of Nifty

This is weekly time bar Chart and I am showing the move after Lowest Degree wave (2) marked on (Chart 1). There is the end of wave (2) and start of wave (3) at 5118.

Lower Degree wave (i) of (3) from 5118-6343 and wave (ii) corrected just 23-38% of Wave 1. Wave (iii) already projected till 170% and next 200% placed at 8388. We will try to identify later if it is completed or not. A formation of diagonal can be identified at top.

Again, wave marked in red box is extreme lowest wave 3 (iii) of all time frames which is steepest of all. And this wave is the midpoint of biggest wave 3 started from 2253.  And now onward, you can expect wave (iv) and (v) followed by (4) and (5) followed by (43) and (53) and followed by last biggest waves 4 and 5 after completion of waves (iii) followed by (3) followed by (33) followed by biggest 3 started in (Chart-1).

Thus, we can expect many up and down swings in next months or years to complete all these smaller, small and big cycles and there will be a completion of extreme biggest cycle after completion of biggest wave 5 where we can expect a biggest correction again.

This explanation is to make you understand wave’s cycles of Elliott’s wave theory. Just read the chapter and try to understand.

Now, let me show you closer look of move after extreme lowest degree wave (ii) started from 5933 to see if it is completed or not on daily time bar chart.

13 Oct 2014 3This is daily chart covering move from 5933 which is the end of extreme lowest degree wave (ii) and start of (iii) on (Chart -1).

Inner waves of (iii) are in progress as marked on chart. Wave (3) is only 110% of wave (1), thus not extended. Read the chapters “Extended Waves”, “Alternations” and topic “Calculation of wave 5”. And calculate where wave (5) can go which started from 7118. Wave (5) already extended 61%.

Earlier, I was expecting the progress of wave (5) as shown on chart. Inner waves (i) and (ii) of (5) were completed and (iii) was in progress where 1, 2 and 3 of (iii) were completed and 4 in progress. I was expecting it clean impulse till now.

But, Possibilities for wave (5) as clean impulse are eliminated as lowest degree wave 4 of (iii) of (5) overlapped wave (ii) after breaching 7840 which is marked by small red circle on (Chart 3). Now next possibilities are given in next (chart 4).

Before starting this (chart 4), I want to say that it’s just possibility. Never be overconfident in identifying patterns, always have protection plan if your predictions goes wrong.

Short TermElliott Wave Analysis of Nifty

Short TermElliott Wave Analysis of Nifty

This is daily time bar chart covering move after wave (4) in (chart 3) which is also the start of wave (5).

I explained in previous chart that possibilities for wave (5) as clean impulse are eliminated and now arise the possibilities of (5) as Ending Diagonal Triangle. Please refer Chapter “Diagonal Triangles”.

ED is of 3-3-3-3-3 structure which is (abc-abc-abc-abc-abc). Here, move from 7118 to 8180 can be taken as waves 1, 2 and 3 (abc-abc-abc) but wave 4 is to fulfill some conditions to qualify wave (5) as ED. These conditions are: –

  1. Wave 4 overlaps wave 2 in ED, so wave 4 here need to break below 7809 which is the start of wave 2. 
  2. Any part of wave 3 should not be below lower line (dotted red line) of Triangle.

And both of these conditions are fulfilled, thus possibilities of 5th as ED are there as of now.

Also see, wave 3 is just 110% of 1, so refer chapter “Extended waves” and “Alternations” and estimate yourself the targets for wave 5 after completion of 4.   

Wave 4 is allowed to go till end of wave 2 in ED which is 7422, but not below the end of wave 2. So, to estimate how lower wave 4 can go, we need to see it closely on lower time frame chart. Let us proceed: –

Very Short Term Elliott Wave Analysis of Nifty

Very Short Term Elliott Wave Analysis of Nifty

This is 30 minutes time bar chart of Nifty covering the move from 8180 to till date which is also the start of wave 4 of (5).

Till Now, we can expect wave 4 progressing at “Complex Correction”, triple zig-zag (abc-x-abc-x-abc) forming a Contracting Triangle”. Refer the Chapter “Types of Corrections” . The wave counts can be taken as shown on (chart 5). It seems (abc-x-abc-x-ab_) is completed and last leg (c) of this complex correction is already completed at 7724 or is about to completed at bit lower levels. This correction is forming a Contracting Descending Triangle and if Nifty breaks its upper line (indicated in small red circle) can scale for new high in medium term.

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This complex correction or wave 4 is either completed at 7724 or about to complete at bit lower levels as both lines of Triangle are narrowing. But the confirmation of completion of correction can only be assumed after breaking of upper line of Triangle as Complex Corrections are often difficult to identify.

Remember: “Complex Corrections” and “Ending Diagonals” are very difficult to identify as inner waves often confuses. Inner waves of “Complex Correction” often act strangely that’s the reason experts always advise to avoid trading corrections.

I didn’t explain this report in details and just hints are given so that you can identify yourself by referring my book “Practical Application of Elliott’s Wave Principles by Deepak Kumar” and knowledge you gained till now. Try to identify yourself, if still you have any question or query just mail me and I will try to explain it with details.

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Category: EWT Articles, 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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