Elliott Wave Analysis of Nifty for the Week Commencing 04 May 2015

| May 3, 2015

Nifty opened flat at 8229 on Thursday but crashed sharply just after opening to hit the low of 8147 within 30 minutes of opening and traded within 8145 to 8210 for rest of the day with range bound volatility.  Nifty traded very near to the lower line of expected Triple Zigzag I mentioned in previous Elliott Wave analysis reports of Nifty but still managed to save it. Let’s see what latest charts are suggesting.

Elliott Wave Analysis of Nifty for May 2015 Daily Chart

Elliott Wave Analysis of Nifty for May 2015 Daily Chart

This is daily time bar chart of Nifty covering move after Jan 2015 high of 8996 which I explained in my previous Elliott Wave analysis reports of Nifty expecting a formation of Triple Zigzag correction.

The most probable structure in case of Triple Zigzag is shown on chart. May be wave (X2) is already completed at 8844 and last “abc” cycle is in progress. Nifty should not break below lower line of Triangle to keep this pattern valid and completion of Triple Zigzag can only be confirmed after breaking above upper line. Lower line of Triangle is still safe and we need to see ongoing waves on lower time frame chart to see further probabilities.

But it is risky to predict anything in advance. So it is just a possibility to keep in mind as charts will show when it really happen. Last or 3rd “abc” cycle of Triple Zigzag have tendency to turn maximum technical indicators opposite, being highly volatile and to confuse the majority before completion.

Let’s analyze the last decline from 8844 on 15 minutes chart:

Elliott Wave Analysis of Nifty for May 2015 15 Minutes Chart

Elliott Wave Analysis of Nifty for May 2015 15 Minutes Chart

This is 15 minutes time bar chart of Nifty covering move after 15th April high of 8844.

It seems an impulsive wave completed or is in progress which started from 8844 and given low of 8145 till now followed by a small bounce. Wave 5 of this impulse already achieved normal projection of 61% after breaking 8159 and moved in extended zone.

We can see sharp bounce till 8363 – 8504 if wave 5 already completed at 8145 as extended 5th wave. On the other hand, 23%, 38% and 61% retracements of this impulse are placed at 8309, 8412 and 8576 respectively which is quite possible in short term.

Let’s move to see the inner wave (5) of this impulse separately on 5 minutes chart for more clarity.

Elliott Wave Analysis of Nifty for May 2015 5 Minutes Chart

Elliott Wave Analysis of Nifty for May 2015 5 Minutes Chart

This is 5 minutes time bar chart of Nifty covering decline after 22 April high of 8504 which I am expecting as start of inner wave (5) of impulse.

It seems wave (i), (ii), (iii), and (iv) are already completed and (v) is completed or in progress. Wave (v) already achieved its minimum Fibonacci projection of 38% and a causal look at the counts suggests that it is completed at 8145 as an impulse. Now, we need to analyze the bounce after low 8145 for more clarity.

Let me show you the bounce after 8145 on separate chart:

Elliott Wave Analysis of Nifty for May 2015 5 Minutes Chart

Elliott Wave Analysis of Nifty for May 2015 5 Minutes Chart

This is 5 minutes time bar chart of Nifty showing bounce after Thursday’s low 8145.

It seems wave 1 and 2 are completed Thursday followed by inner wave (i) and (ii) of 3. The closing pattern on chat is suggesting a gap up on Monday and if the pattern I shown on chart is right then nifty can give sharp bounce above 8272 in next session.

But Nifty need to open Gap Up and should not break below Thursday’s close 8181 to validate this pattern. So stop loss for longs must be 8181 to protect our trade if we proved wrong in identifying the pattern.

Conclusion:

Nifty is badly due for a bounce and Nifty charts are suggesting the same.  Nifty can show bounce till 8309, 8412 and may be 8756 in coming session and lower line on first chart need to be saved for that which is around 8130 now.

Immediate stop loss for any existing/fresh longs should be 8181 as explained above which can be reduced later if we see expected bounce. Personally, I would like to go with “Buy on Dips” strategy with small stop loss and will never sell at these levels.

If Nifty open Gap up and trades above opening level after 9:31 AM on Monday, it may be the sign of strength. Trade accordingly.

Many other analysts and technical indicators are suggesting lower levels till 7600 for Nifty in coming days. I don’t ignore the possibilities as market is supreme and anything is possible but never trade big in hurry seeing attractive targets. Whatever your trade is, trade light and trade with stop loss.

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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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