Elliott Wave Analysis Report of Nifty for 21 Dec 2016

| December 20, 2016

Nifty opened flat at 8110 and bounced to register day’s high 8124 but failed to sustain at higher levels and trade with negative bias for rest of the day. Nifty declined by 60 points from day’s high to register day’s low 8062 before closing 21 points down at 8082.

Yesterday, stoploss for existing/fresh shorts was 8144 and suggested to hold existing shorts for minimum targets 8077-8056. Any buying was suggested only above 8144. Nifty achieved long awaited 8077-8056 range but very slowly and took 7 sessions.  Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 21 Nov 2016 low 7916 to conclude short term scenario and previous wave counts are explained in my previous analysis report Elliott Wave Analysis Report of Nifty for 05 Dec 2016

Elliott Wave Analysis of Nifty for 21 Dec 2016

Elliott Wave Analysis of Nifty for 21 Dec 2016

This is 30 minutes time bar chart of Nifty covering bounce from 21 Nov 2016 low 7916. This is the same chart with explanation which I had explained in my last report because there is no major change in wave counts on this chart.

As I explained earlier, an impulse seems completed from 7916-8250 with inner wave (1) may be completed from 7916-8055 (pattern is not clear), wave (2) may be completed from 8055-7952, wave (3) may be completed from 8055-8122, wave (4) may be completed from 8122-8066 and wave (5) may be completed from 8066-8250 as ED which projected more than 61%. Learners, please looks at the inner wave counts of ED carefully. This impulse can be wave (A or 1).

38%-61%-78% retracement of this whole impulse (from 7916-8250) is placed at 8122-8043-7987 where 38% is already achieved.

The next bounce from 8056-8274 is a three wave’s (abc) move which is indicating some sort of Irregular wave (B) of Irregular Correction completed at 8274. And if an Irregular (B) completed at 8274 then there must be wave (C) started from 8274 and wave (C) is always an impulse.

On the other hand, we generally see wave (C) to project till end of (A) which is 8056. So, this pattern is indicating a decline towards 8056 and pattern of decline must be impulse. Nifty almost achieved 8056 but there is no clear sign that an impulse is completed.

And further, if I am right at identifying the pattern and it is really Irregular Correction in progress then we can see a very sharp bounce of 350-500 points after completion of this Irregular Correction around 8056.

Read the details article explaining pattern, personality, calculations and effects of Irregular Correction at Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar

Now, let’s analyze the decline from 8274 separately to see if there is any sign of impulse in progress. Any impulsive decline from 8274 will support the possibility of big Irregular Correction otherwise we need to analyze smaller waves for very short term outlook.

Elliott Wave Analysis of Nifty for 21 Dec 2016

Elliott Wave Analysis of Nifty for 21 Dec 2016

This is 15 minutes time bar chart of Nifty covering decline from 9 Dec high 8274.

It seems impulse is completed from 8274-8255 which could be wave (a or 1) followed by an irregular correction from 8155-8225 as wave (b or 2) and wave (c or 3) may be in progress from 8225. Wave (c or 3) had already achieved normal 123% projection after breaking below 8077.

38% retracement of wave (c or 3) is placed at 8124 which is the point above which we can think of any reversal and sane must be the stoploss for any existing/fresh shorts.

Conclusion:

For medium term, there is possibility of Irregular Correction pattern and Nifty have possibility to bounce sharply by 350-500 points after completion of Irregular Correction near 8056 if I am right at identifying the pattern. But any trade must be hedged because the pattern of last wave (C) of irregular correction (wave start from 8274) is not clear.

Read the details article explaining pattern, personality, calculations and effects of Irregular Correction at Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar

For Intraday/Very short term, Nifty almost achieved long awaited 8056 but decline from 8274-8062 is not giving any clear signs of completion of any impulse. 8124 [(38% retracement of wave (c or 3) progressed till now] is the point above which we can think of any reversal and same must be the stoploss for existing shorts.

For Trading Point of View:

Nifty almost achieved our long awaited target 8056 so profit must be booked in all the shorts and wait for fresh opportunity because pattern is not completely clear and there is a possibility of good bounce if it is Irregular Correction in progress as explained on 1st 30 minutes chart. If someone wants to hold part positions can use 8125 as fresh stoploss for shorts.

Buy Nifty only if “trades above tomorrow’s opening price at 9:31 AM” and  “touch 8125” (both conditions must match) using stoploss of 8095 points expecting targets 8200-8225 which further can extend above 8274. Hold for next day only if Nifty closes near high of the day. Use strict stoploss.

Nifty is moving very slowly forming a confusing type of pattern from last 6-8 days without giving any clear indications. So, any trade must be in light quantity using strict stoploss with regular profit booking.

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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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