Elliott Wave Analysis Report of Nifty for 02 May 2016

| May 2, 2016

Nifty opened flat on Friday at 7844 and bounced sharply to register day’s high 7889. But Nifty failed to sustain at higher levels and fall again by 100 points to register day’s low 7788 followed by bounce again of 80 points before closing flat at 7849. Overall it was a highly volatile day with huge swings. Let’s have a further look at latest charts now.

Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Outlook of Nifty for Budget Day 29 Feb 2016 Onward.

Elliott Wave counts of Nifty for May 2016 on hourly chart

Elliott Wave counts of Nifty for May 2016 on hourly chart

This is hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825.

After seeing most of the conditions and structure on chart it seems wave (3) completed at 7742 followed by wave (4) completed at 7516 as “Irregular Correction”. There are repeated Irregular Corrections in this whole bounce from 6825.

Now, if wave (4) is completed at 7516 then minimum 38%-61% projection for wave (5) is placed at 7862-8078 where minimum 38% is already achieved and we need to look at its pattern and inner waves for further probabilities.

Now let’s try to identify inner waves of bigger wave (5) started from 7516 as shown on first hourly minutes chart.

Elliott Wave counts of Nifty for May 2016 on 15 minute chart

Elliott Wave counts of Nifty for May 2016 on 15 minute chart

This is 15 minute’s chart of Nifty covering bounce from 11 April 2016 low 7516 which I am expecting as start of wave (5).

Most probably, it may be wave (1) completed at 7717, (2) completed at 7674, (3) completed at 7950 and later counts explained below.

Wave (3) is just 138%, thus not extended and 161% for wave (3) is placed at 7997. So wave (5) needs to be extended (above 61%). But Nifty declined without achieving 61% projection (8090).

So, may be the bounce from 7822 is not wave (5) and wave (4) is still in progress as Irregular Correction and a high above 7992 is possible again which we can’t ignore.

But Nifty should not break 7717 to keep this pattern intact as wave (4) can not overlap wave (2) in clean impulse.

Let’s calculate inner waves of the move after 26 April low 7822 on separate 5 minutes chart.

Elliott Wave counts of Nifty for May 2016 on 5 minute chart

Elliott Wave counts of Nifty for May 2016 on 5 minute chart

This is 5 minute time bar chart of Nifty covering move from 26 April 2016 low 7822.

Let’s have a look at bounce from 7822 first, if we assume this bounce as impulsive (5 waves) then inner wave (5) failed to achieve minimum 38% project as shown on chart.  38% projection for wave (5) is placed at 7994 whereas Nifty declined from 7992.

So, again there is possibility that bounce from 7822-7992 is not impulse but corrective and can be inner wave (b) of Irregular Correction and wave (c) in progress. So, Nifty has possibility to bounce above 7992 again in near term.

Now, if we look at decline from 7992 which I have shown as progress of wave (c) of Irregular Correction then it seems wave (3) completed at 7788, (4) completed at 7867 and (5) may be in progress. Minimum 38% projection for wave (v) is placed at 7789 whereas next 61%-100% projection is placed at 7740-7663.

Other Possibility in the whole bounce from 6825:

There is one more possibility which is showing sign on chart now. Please pay attention at the chart and read the explanation carefully.

Elliott Wave counts of Nifty for May 2016 on hourly chart

Elliott Wave counts of Nifty for May 2016 on hourly chart

 

This is again hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825. There is possibility for the formation of Ending Diagonal (ED) on this chart after 7405.

May be wave (4) completed at 7405 followed by wave (5) as Ending Diagonal where inner wave (i) completed at 7778 as (abc), (ii) completed at 7517 at (abc), (iii) completed at 7978 as (abc) and (iv) may be in progress from 7978 as “Irregular Correction”. Nifty must break 7778 in this case as wave (iv) must overlap (ii) in ED but should not break below 7517 (start of wave (iii).

So in this case, Nifty can first decline below 7778 to complete wave (iv) of ED followed by (v) above 7992. This possibility will be negated only below 7517.

On the other hand, there are repeated “Irregular Correction” within this whole move. First there was a sudden and steep bounce of 700 points from 6825-7600 which didn’t show clear waves. And then there were 02 repeated back to back “Irregular Corrections” in 7400-7600 range which is very difficult pattern to identify in advance and often confuses.

And there were more “Irregular Corrections” later including the probability of “Irregular Correction” at top 7992 also.

Overall, this whole bounce from 6825 till now comprises of sudden/steep bounces and repeated “Irregular Correction” which made the situations difficult to identify patterns and count waves confidently in last 02 months. That is the reason I was not consistent with the medium term pattern from last 1-2 months as patterns were changing quickly.

Conclusion:

After analyzing all the conditions and possibilities on all the charts, strongest probability is that Nifty can show high above 7992 once more in near term and important downward levels is 7778 and then 7717-7663.

The whole pattern from 6825 is warning a good decline but it left suspense at top 7992 as last upside wave from 7822-7992 didn’t fulfill the conditions (as explained on charts). So, we can’t say confidently that main decline/fall has started as there is still a possibility for new high above 7992 again.

I am not suggesting any particular trade today as there are different possibilities and an exact stoploss cannot be calculated at present. But any trade can be decided based on above mentioned conditions with strict small stoploss after identifying small pattern on 5 minutes chart during live market hours. Never trade in hurry without patience and exact small stoploss.

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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"