Elliott Wave Analysis Report of Nifty for 11 July 2016

| July 11, 2016

Nifty opened mild higher at 8350 but traded with negative bias for rest of the day. Nifty declined below 8300 to register day’s low 8287 followed by a bounce of 40 points before closing 14 points down at 8323.

In my last report, I mentioned that 8317-8267 range is possible on downside and strategy was to hold shorts and Sell on rise expecting 8317-8267 as target range. Nifty declined till 8287 without hitting stoploss and bounced back again. Let’s have a fresh look at latest charts for further scenario.

Today I am covering move from 24 June 2016 low 7927 as previous waves are same as I explained in my previous analysis report Elliott Wave Updates and Outlook of Nifty for 08 July 2016

Nifty Elliott Wave Analysis for 11 July 2016

Nifty Elliott Wave Analysis for 11 July 2016

This is 15 minutes chart of Nifty covering move from 24 June low 7927 which I am expecting as progress of new impulse upside.

It may be wave (1) completed from 7927-8120, wave (2) completed from 8120-8056, wave (3) completed from 8056-8398 and wave (4) may be in progress or already completed at 8287.

Wave (4) achieved 23% retracement after breaking below 8317 where 38% retracement is placed at 8267. So, 38% retracement 8267 must be the stoploss for any positional longs and an important point below which only we can think of any medium term reversal.

If wave (4) is already completed at 8287 then minimum 38%-61% projection for wave (5) is placed at 8466-8578 which is the minimum expected target range in this case.

So, let’s have a look at decline from 8398 to identify if wave (4) is already completed at 8287 or still in progress.

Nifty Elliott Wave Analysis for 11 July 2016

Nifty Elliott Wave Analysis for 11 July 2016

This is 5 minutes time bar chart of Nifty covering decline from 04 July high 8398 which I am assuming as progress of wave (4) till now.

It seems an impulse is completed from 8398-8319 which can be wave (A or 1), wave (B or 2) may be completed from 8319-8262 which retraced almost 61% of (A or 1).  And further wave (C or 3) achieved its minimum 61% projection (in case of wave C) but the pattern doesn’t look like an impulse (Wave C is always an impulse).

The decline from 8362-8287 looks like a 3 waves (abc) move and waves are also overlapped later. So, there is no confirmation that wave (c) is already completed at 8287 or still there is some complex type of Irregular Correction going on.

And there are 02 possibilities for the bounce started from 8287: –

  1. Either this move from 8287-8333 is wave (ABC). So Nifty should not break above 8333 (end of wave C) and must decline below 8287 in this case.
  1. Or this bounce from 8287-8333 can be wave (1), (2) and inner waves (i) and (ii) of (3). Nifty needs to move higher in this case, may be till 8466-8578 range. Break above 8333 again will support this possibility.

So, 8333 is the point based on which we can planning next trading strategy.

Conclusion:

Nifty started declining from 8398 and achieved 23%-38% retracement after achieving 8317-8267 range perfectly as we expected. But pattern of last decline from 8362-8287 left some confusion which made it difficult to conclude next move confidently.

Generally 8267 is the important point below which we can think of any reversal and Nifty have possibilities to  bounce higher above 8399, may be 8466-8578 until Nifty is trading above 8267. And there are different conditions on lowest time frame chart explained above based on which we can prepare next trading strategy.

So for trading point of view,

  1. Avoid Selling as long as Nifty is trading above 8267 or until we see any confident reversal pattern.
  1. Nifty can be bought if break above 8333 with stoploss of 8313 (20 points) and manage with trailing stoploss if Nifty move higher. Nifty breaking above 8399 can further extend to 8466-8578. Avoid this trade if Nifty opens huge gap up above 8333.
  1. If Nifty opens gap up and breaks above 8399 then use any 23%-38% retracement/dip of whole move started from 8287 to buy with stoploss below 38% retracement expecting upside targets 8466-8578.

Safe traders can avoid trade and wait for clarity. And keep strict stoploss on the trades as last decline from 8362-8287 looks like a (ABC) move and Nifty can decline below 8287 again if there is Irregular Correction formed at 8287.

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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"