Elliott Wave Analysis Report of Nifty for 01 Oct 2018

| September 30, 2018

Nifty opened higher at 11008 and declined sharply to register day’s low 11924. Nifty bounced again by more than 100 points from 10924-11031 but failed to sustain at higher levels and declined back by more than 180 points to register day’s low 11850 and closed 47 points down at 10930. Overall, it was a huge volatile session.

Yesterday, I mentioned that pattern is not clear but wave’s personalities are indicating sharp decline for low below 10850 or minimum 200 points bounce and possibilities for decline were higher.

Hedged trade taken on Thursday by buying both Call and Put of Oct expiry near 11050 was suggested to hold expecting sharp move of 200 points either side and trade was advised to close if Nifty declines below 10882. Nifty declined by 200 points from 11050 in 2 sessions and registered low 10850 on Friday. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 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 counts of Nifty on Daily Chart

Elliott wave counts of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 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, 2 is completed and 3 may be in progress from 7893. Within wave 3, it seems inner wave i, ii, iii, iv completed at 9687 and v may be in progress.

But after 9687, the bounce is a combination of 3 waves. So, there is a possibility of Ending Diagonal Pattern after 9687 as wave ‘v’. If this is the case then this ED is going on since Sep 2017, so whole pattern may take more time to complete.

Let me show the possibility of Ending Diagonal Triangle on separate chart.

Elliott wave counts of Nifty on Daily Chart

Elliott wave counts of Nifty on Daily Chart

This is again a daily time bar chart of Nifty covering bounce after 9687 which is indicating a possibility of Ending Diagonal Triangle.

The last bounce from 9951-11760 looks like a clear 3 waves (abc) move, and (abc) wave at all time high indicates “Irregular Correction” or “Ending Diagonal Triangle” but earlier bounce from 9687-11171 also look like (abc) wave. So, repeated (abc) waves at top are indicating possibility of Ending Diagonal Triangle.

So, there is possibility of Ending Diagonal Triangle (abc-abc-abc-abc-abc) from 9687 as wave ‘v’ with inner wave (1) completed from 9687-11171, (2) completed from 11171-9951, (3) completed from 9951-11760 and (iv) may be in progress. Pattern of wave (2) is not clear and creating confusion.

If this move is really an ED then wave (4) of (ED) normally retraces till the “start of inner wave (c) of (3)” or till the “end of inner wave (i) of (c) of (3)” (my own observation). “End of inner wave (i) of (c) of (3)” is 10893 and “start of inner wave (c) of (3)” is 10517. So, 10893-10517 is general expected range for completion of wave (4) of (ED) and Nifty already entered in this range.

The possibility of ED is just for awareness and but not confirmed yet. So, we need to concentrate on decline started from 11760 to calculate immediate move until larger pattern gets clear.

Elliott wave counts of Nifty on Hourly Chart

Elliott wave counts of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering decline after 11760 which I am analyzing independently because there is bit confusion on higher time frames.

There is impulse completed from 11760-11269 and same can be assumed as wave (A), Irregular Correction from 11269-11523 can be marked as wave (B) and wave (C) may be in progress.

Within wave (C), it seems inner wave (i), (ii), (iii) completed till 10866, (iv) may be completed at 11191 and (v) may be in progress. Minimum 38%-61% projection for wave (v) is placed at 11940-11784 whereas end of wave (iii) is 10866. So, 10866-11784 is minimum target range for wave (v) of (C) and Nifty already entered in this range.

Confusion: – Pattern of wave (iv) of (C) from 10866-11191 looks like an Impulse and is not clear because of sharp decline of 400 points followed by bounce of 320 points bounce in a single session.

Now, let’s analyze the pattern of expected wave (v) of (C) started from 11191 on separate chart.

Elliott wave counts of Nifty on 15 Minutes Chart

Elliott wave counts of Nifty on 15 Minutes Chart

This is 15 minutes time bar chart of Nifty covering decline after 11191 which I am expecting as start of wave (v) of (C) on hourly chart.

This decline also consists of repeated (abc) waves, and the same is indicating that wave (v) of (C) is progressing as Ending Diagonal Triangle.

So, inner wave [1] of ED may be completed from 11191-10882 as (abc) wave, [2] may be completed from 10882-11145 as Simple Zigzag Correction and Wave [3] may be in progress.

Normal 100%-123% projection for wave [3] of ED is placed at 10836-10763. So, 10836-10763 is general expected completion range for inner wave [3] of ED.

Within wave [3], it seems inner wave [a], [b] is completed and [c] may be in progress from 11088. 38% retracement of progress of wave [c] is placed at 10940. So, 10940 is immediate breakeven point and Nifty if breaks above 10940 can bounce further towards 10994-11088.

Overall, 10836-10763 is mild support, 10940 is breakeven point, 10994-11088 is immediate resistance and 11145 is pattern negation point.

Conclusion

Nifty declined from 11760 without completing Impulse pattern which confused me and we also had repeated wrong trades because of this confusion. But a script can’t make top with corrective (abc) wave, so I cross checked higher time frames and identified the possibility of Ending Diagonal Triangle Pattern (ED) started from 9687 since 28 Sep 2018.

The Ending Diagonal is just a possibility for awareness and not confirmed yet. But if this is really an ED and running since 1 year then coming months are going to be tougher with lots of confusions because Diagonal Triangle is a complex pattern and last phase of ED is known for abnormal moves. So, I will keep watch on this possibility and will update as required.

For very short term/Intraday, again there is a possibility of ED at bottom started from 11191 which is within inner wave [3]. So, short term outlook is also tough because of possibility of ED.

Fibonacci Ratio wise, 10836-10763 is mild support and 10993-11088 is immediate resistance. 10940 is immediate breakeven point and Nifty if break above 10940 can bounce further towards 10993-11088. 11145 is pattern negation point for ED and possibility of ED at bottom will get negated if Nifty breaks above 11145.

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

Trading Points of View:

It is difficult to decide a low risk trade in such conditions because Support range 10836-10763 and resistance range 10993-11088 is big. We need a stoploss of 100 points to decide safe trade and I don’t prefer to trade with big stoploss in tough conditions. Let me explain some other possible trading conditions:-

  1. Trade can be planned after break above immediate breakeven point 10940 but minimum target is 11993 which is just 50 points, so risk reward is low in this trade.
  1. Selling can be planned using stoploss above 10940 for targets of 10836-10763 but this trade can decided during market hours only after seeing the pattern and personality of move.
  1. 11145 is pattern negation point, so selling can be done using stoploss of above 11145 but it is more than 200 points away and we need confirmation from pattern if Nifty manages to bounce near this point.

Overall, I am not confident to suggest any trade in advance but I explained conditions. 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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