Elliott wave Analysis Report of Nifty for 03 Sep 2014

| September 2, 2014

Nifty hits a new milestone of 8100 today after breaking psychological levels of 8000 in previous session. Nifty is rising continuously without any reasonable correction from 7540 and gained almost 560 points in 14-15 sessions with only one correction of 100 points.

Nifty is continuing its journey towards new high every next day with extreme bullish sentiments and there is no sign of weakness yet, lets it be on charts, open interest or technical indicators. We went long yesterday seeing extremely bullish sentiments coupled with low risk opportunity on charts and booked today with 60-65 points profit.

Let us analyze the further scenario:

04 Sept 2014This is hourly chart of Nifty covering whole up move from 7540 to till date.

There is no change in previous counts on hourly chart. I still assuming wave 0-3 from 7540-7919 seeing Gaps and Steepness followed by minor correction 7857 as wave 4 and then the start of wave 5 that is still in progress.

If I go with these counts, Wave 5th extended above 61% which is placed at 8091 and now 70% is place at 8124 and 100% placed at 8236. Nifty is comfortable for usual minor correction till it is below 70%.

But, entering in 70%-100% (8124-8236) zone will be cautions for sharp correction till 7967-7850 as wave 5 will enter in extended category and extended fifth usually corrects 100%.

And if I see only wave 5, it seems only 1 and 2 are completed and 3 is still in progress or completed and 4 and 5th are still pending that can take it in extended/danger zone. Inner wave 3 of bigger 5 extended 200% of 1 till now.

Overall, after completing this whole 5 wave move Nifty will be due for correction that can be anywhere between 38%-50%-61%-70%. 50%-70% will be somewhere between 7850-7750 assuming 8100-8200 as top.

Let us see very short term probabilities now:

04 Sep NiftyThere is some change in very short term counts. It seems the last move from 8006-8101 just completed waves 0-3 and 4 in progress where wave 3 extended 438% of 1.

And the next move after hitting 8101 is very difficult to predict as of now. It may be: –

  1. ABC correction for wave 4 that corrected 23%-38% of wave 3 and 1st of 5th is started.
  2. Complex correction is in progress as Descending Triangle.  
  3. “A” of ABC is in progress as Leading Diagonal.
  4. Or Wave 1 and 2 of Downward completed and 3rd started, that can take it to lower levels

I just stated the possibilities; clear picture may be seen after later move.


It is not advisable to predict the moves in advance. These possibilities are just my homework and planning till now so that I can find any change in pattern or trading opportunity easily keeping these possibilities in mind.

Trading Strategy:

There is no trading strategy I can suggest at present. I would not go short unless I see any clear identification. I made some mistakes chasing wave 3 last month but will avoid repeating same mistake again. Wave 5 is mostly confusing and hits many stop losses of weak traders so I will wait for clear low risk opportunity for shorts and will be silent till then.

I can trade both on long side or short side if I see any low risk opportunity with 10-17 points 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"

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