Elliott Wave Analysis Report of Nifty for 20 May 2019

| May 19, 2019

Nifty opened almost flat at 11261, registered low 11259 and bounce by more than 160 points to register day’s high 11426 and closed 150 points up at 11407.

Yesterday, Overall Nifty was in negative zone with 11323-11368 as major resistance and 11368 as major upside breakeven point. One more decline for low below 11108 was possible without breaking higher above 11368.

Trading strategy was “Selling on Rise” on every 23%-38% bounce or in resistance. I didn’t suggest any confident trade in Nifty Futures/Options because Nifty was not showing reversal near major resistance 11368. Only hedged trade by Buying 11300 Put and Selling 10900 Put of 23 May was suggested. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott Wave Counts of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress. Minimum 38%-61% projection for wave 5 is placed at 11664-12689 but earlier high is 11760, so 11760-12689 is minimum target range for completion of wave 5. Wave 5 achieved minimum 11761 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.


Elliott Wave Counts of Nifty on Daily Chart

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart.  

It seems an Impulse completed from 10004-10985 and same can be marked as wave (A or 1), there is Double Irregular Correction from 10985-10585 and same can be marked as wave (B or 2) and wave (C or 3) may be completed at 11856.

38% retracement of progress of wave (C or 3) is placed at 11370 and same was broken. 11370 was short/medium term breakeven point and is the deciding point from where Nifty can bounce for new life high or can start further decline towards 10585-10004. Nifty traded below 11370 for 2-3 session and warning cautions for decline towards 10585-10004 in coming days/weeks. Nifty achieved 11108 but bounced back and trading above 11400 again.

The pattern formed may be Irregular Correction at top or wave 5 may be progressing as ED.

Now, let’s analyse the decline started from 11856 to check its pattern and internal wave counts.


Elliott Wave Counts of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering decline after 11856 which I marked as end of wave (C or 3) on daily chart.

It seems, wave (a or 1) may be completed from 11856-11588, wave (b or 2) may be completed from 11588-11789 as irregular correction and wave (c or 3) may be in progress.

38% retracement of progress of wave (c or 3) is placed at 11368 and is already broken on Friday and same is the point of confusion.

Within wave (c or 3), it seems inner wave (i) completed from 11796-11625, (ii) may be completed from 11625-11789 as Double Zigzag Correction and wave (iii) may be completed at 11108  and wave (iv) may be in progress.

Other Possibility: If wave [3] of (iii) is completed at 11255 and [4] is still in progress as Irregular Correction then breakeven point is 11458.

Overall, there is confusion because upside breakeven point 11368 is broken but pattern is not indicating confident upside reversal yet. Now, let’s have a separate look at the pattern of wave (iv) lowest possible time frame.


Elliott Wave Counts of Nifty on 15 Minutes Chart

This is 15 minute time bar chart of Nifty covering bounce after 11108 which I marked as start of wave (iv) on hourly chart.

It seems wave (a or 1) completed from 11108-11294, wave (b or 2) may be completed from 11294-11137 [pattern is not clear] and wave (c or 3) may be in progress. Wave (c or 3) already projected more than 123%.

It tried to mark inner waves of (c or 3) but counts are not confident because of abnormal retracements and projections within the wave.

23%-38% retracement of progress of wave (c or 3) is placed at 11357-11315. So, 11357-11315 is immediate support and 11315 is immediate downside breakeven point. Nifty if breaks below 11315 can result in further decline towards 11108-11000 otherwise Nifty can bounce further.

Conclusion

For Short/Medium Term: – Short/Medium term outlook is not clear because breakeven of major breakeven point 11370 was indicating further decline towards 10585-10004 but upside breakeven point 11368 also broken on Friday. On the other hand, pattern is not indicating any clear signs of upside reversal yet.

Fibonacci wise, 11357-11315 is immediate support and 11315 is immediate downside breakeven point. Nifty if breaks below 11315 can result in further decline towards 11108-11000 otherwise Nifty can bounce further.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

Pattern is still indicating decline for low below 11108 but breaking of 11368 is confusing. So, we can’t take any confident call in confusing conditions. May be Nifty is forming a Complex Pattern of wave are retracing/projecting abnormally near big event.

11357-11315 is the range (if we get there) where we can observe Nifty move to find trading opportunity. Selling can be done after break below 11315 only and same 11315 can be used as stoploss for any longs.

I will update about the formation of any important internal pattern or any change in pattern/important levels or any low risk trading opportunity during market hours by WhatsApp Broadcast.

Inexperienced traders are advised to avoid getting greedy by seeing big volatile moves and avoid trading till 23 May if possible. Stoploss can trigger even if you are right at identifying the move and trading without stoploss can result in bigger losses.

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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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