Elliott Wave Analysis Report of Nifty for 12 Feb 2016

| February 12, 2016

Nifty have shown a good decline of more than 250 points today and also broke below 7000. After opening flat at 7203 started declining and traded with huge weakness for rest of the day. Nifty declined gradually till 7659 before closing huge 239 points down at 7976.

Today’s I am not showing counts but structure of  from all time high as the pattern which I was assuming earlier have broken and now it may take some time to identify waves exactly. The wave counts till all time high you can read in my all time frame report.

Elliott Wave Analysis of Nifty

Elliott Wave Analysis of Nifty

This is daily time bar chart of Nifty covering move after all time high 9119. I am not showing any wave counts on this chart but just added for some observations.

The pattern which I assumed previously is negated as Nifty broke below lower line of channel today which should not be broken within Triple Zigzag and now I need to wait for some signs of other pattern which may take time.

But if I look at last decline from 8336-6959 then it started slowly, progressed with speed and finally crahsed suddenly. This type of pattern I have observed many time within wave (5) and (c) and some time in wave (3) also. And we also see a sharp reversal after this pattern some times.

So, we need to observe what happens next and also can go long only if see any sign of reversal.

Now, lets have a look at last decline from 7600:

Elliott wave counts of Nifty for 12 Feb 2016

Elliott wave counts of Nifty for 12 Feb 2016

This is 15 minutes time bar chart of Nifty covering decline from 01 Feb high 7600.

It may be wave (1) completed from 7600-7350 but later it is not sure if wave (3) completed at 7175 and (5) started from 7256 as shown on chart or it is still wave (3) going on.

If it is wave (3) completed at 7175 then it is not extended and wave (5) already achieved minimum projection of 61% after breaking 6993 whereas 100% is placed at 6832 which may or may not be achieved.

But if the point 7175 which I marked as wave (3) is actually inner wave (i) of (3) then I can’t say where it is going to be end, and Nifty should not stop in this case. So, it is better to have patience to enter aggressively. 

Conclusion: 

Nifty negated the pattern today which I was assuming earlier after breaking lower line of channel and now it will take some time to identify exact pattern. We couldn’t catch this fall but we identify the danger at perfect time and exited our longs, March- April call at 7600-7500 and didn’t initiate trade after that.

Now there is type of pattern at bottom which is indicating a good reversal of a good down move but we can’t initiate any hedge trade in options as VIX is at higher levels of 26 and options are really expensive to buy not safe for hedge trade. And in futures, there is no way to calculate small stoploss in these conditions. So, we need to wait for a perfect entry where we can place small stoploss.

But if reversal happen then it must be sharp till 7600 at least, , so any day from tomorrow onwards, one can buy Nifty if it trades above opening price anytime after 9:35 AM with strict stoploss of 33 points and hold for next day only if Nifty is about to close near day’s high otherwise book intraday. Trade only if conditions match and with strict stoploss as Nifty is at crucial stage.

And if someone developed abilities to identify waves then try to trade in stocks in cash price which are showing pattern for reversals. Stocks can give good returns than FNO in these conditions and are less risky at present. I don’t have time to analyze stocks but will try to analyze 2-3 stocks this weekend showing good upside possibilities.

Keep patience and avoid any trade in panic, market will give great trading opportunity tomorrow or later. Save your capital for best opportunity.

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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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