Elliott Wave Analysis Report of Nifty for 11 Dec 2015

| December 10, 2015

Nifty opened gap up today at 7643 and declined till 7610 but bounced again from lower levels to register day’s high of 7691 before closing 70 points up at 7683.

Yesterday I mentioned that downside is limited and we need to see a bounce very soon before any further fall and minimum bounce should be 23%-38% of decline from 7979-7606, means we can expect a bounce of 90-140 points from lows. Nifty bounced 85 points from lows without falling further. Let’s have a look at fresh charts.

Today’s  I am showing wave counts from Oct 2015 high 8336 as previous counts are same as I explained in my previous report Elliott Wave Outlook of Nifty for Dec 2015 Series.

Elliott Wave Analysis of Nifty for 11 Dec 2015

Elliott Wave Analysis of Nifty for 11 Dec 2015

This is 30 minutes time bar chart of Nifty covering decline after Oct 2015 high 8336. As I explained in last 3 reports, after breaking the low of 7714, it seems previous decline from 8336-7714 may be waves 1,2 and 3 and it is wave (5) in progress from 7979.

Previous decline from 8336-7714 was steep with just one noticeable correction in between. If that one correction from 7997-8114 we assume as wave (2) then wave (3) projected less than 161%, thus wave (3) is not extended.

Now, if wave (3) is not extended then wave (5) we can expect as extended, thus we can expect wave (5) to project more than 61%. Wave (5) already achieved 38% projection after breaking below 7741 where as 61%-100% is placed at 7594-7357. Wave (5) is still short of minimum 61% projection which is placed at 7594 if I am right at marking waves 1 and 3.

Let’s have a separate look at decline from 7979.

Elliott Wave Analysis of Nifty for 11 Dec 2015

Elliott Wave Analysis of Nifty for 11 Dec 2015

This is 5 minutes time bar chart of Nifty covering decline after 02 Dec high 7979.

Wave counts on this chart are also same as I explained in my last 2 reports, it seems a progress of downward impulse from 7979 which is within its inner wave (3) or (5) as shown on chart.  I have marked wave (3) at 7746 and (4) at 7771 because there is some sort of impulse started from 7771 because of which I expected a fall till 7627 and then bounce back.

But there is no reasonable correction for wave (4), wave (4) I marked on chart is just minor which may not be (4) and maybe it is just wave (3) which completed at 7606 and bounce from low is wave (4) followed by fall below 7606 pending as wave (5).

And bounce from low 7606 is not carrying the personality of any big reversal till now. Nifty needs to complete first impulse above 7771 otherwise this bounce from 7606 can only be a corrective wave and we can see a fall below 7606 again.

23%-38% retracement of whole decline from 7979-7606 is placed at 7694-7748 which we expected yesterday as minimum bounce.

So, we need to concentrate on wave pattern of bounce from 7606 only for any further trading decision. Let’s have a look at wave counts on bounce from 7606 on separate 5 minutes chart.

Elliott Wave Analysis of Nifty for 11 Dec 2015

Elliott Wave Analysis of Nifty for 11 Dec 2015

This is 5 minute time bar chart of Nifty bounce from yesterday’s low 7606.

In this chart, bounce from 7606-7651 may be wave (1 or A), and then decline from 7651-7610 may be wave (B or 2) as simple zigzag, followed progress of wave (C or 3) from 7610.

Within wave (C or 3), it seems waves 1, 2, 3 and 4 are completed and 5 is in progress as shown on chart.  Wave (5) already achieved its minimum projection of 38% where as 61%-100% projection is placed at 7694-7720. 7694 is also 23% retracement of decline from 7979-7606. Wave (5) will be extended after projecting more than 61%. Wave (C or 3) looks smaller here which is not indicating any big upside.

Now, nifty should not even touch 7651 to keep this bounce impulse as wave (4) can never overlap wave (2) within an impulse. So, stoploss for any longs must be 7651 now, even touch of 7651 can take Nifty below 7606 again.

Conclusion:

Nifty bounced as we expected but personality of bounce is not convincing for any big reversal till now. Nifty needs to completed first impulse above 7771 to indicate any big reversal.

And in the progressing bounce started from 7606, Nifty should not even touch 7651 to keep this bounce as impulsive as wave (4) can not overlap wave (2) within impulse.

So, never be over confident for any big upside and keep booking profits and trailing stoploss for any longs. 7651 should be the stoploss for any longs now, even touch of 7651 can take Nifty below 7606 again.

So, book part profits in existing longs at higher levels and keep stoploss for rest at 7651. Nifty even if touch 7651 can be sold on rise with latest high as stoploss expecting target below 7606.

Any trade can be decided only during live market hours based on above mentioned conditions. Trade light with strict 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"