Elliott Wave Analysis Report of Nifty for 23 Jan 2019

| January 23, 2019

Nifty opened bit lower today at 10949 and declined further after opening to register day’s low 10865 but bounced back again and closed 39 points down at 10922.

Yesterday, bounce towards 11000-11034 was expected with 10932 as breakeven point and Nifty was expected to decline towards 10844 if breaks and stay below 10932 for 15 minutes. Caution for sharp decline towards 10628 was there.

I didn’t suggest any exact trade and advised traders to plan their own trade based on the conditions explained. Nifty breaks below 10932 and decline till 10964. 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 analysis of Nifty on daily chart

Elliott wave analysis 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. This is the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

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.

Point of Cautions: – The reversal after completion of Irregular Correction is known to be sharp but the bounce after 10004 is slower when compared to the speed of wave (c) of Irregular Correction. So, we need to be cautious for one more low below 10004.

Now, let’s analyse the bounce started from 10004 separately to calculate internal moves.

Elliott wave analysis of Nifty on 5 hourly chart

Elliott wave analysis of Nifty on 5 hourly chart

This is 5 hourly time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart. There is no change in wave counts on this chart. There is no major change in wave counts on this chart.

It seems a (ABC) wave completed from 10004-10985 with wave (A) completed from 10004-10645, wave (B) completed from 10645-10333 as Irregular Correction, and wave (C) may be completed from 10333-10985. Wave (C) achieved 100% projection.

From high 10985, the Impulse completed from 10985-10534 can be marked as wave (A or 1). Further upside impulse from 10534-10923 can be marked as wave [A or 1], decline from 10923-10628 can be marked as wave [B or 2] and wave [C or 3] may be in progress from 10628.

There is important observation within the bounce after 10534. So, we can ignore previous move for time being and need to concentrate on bounce after 10534.

Elliott wave analysis of Nifty on 30 minute chart

Elliott wave analysis of Nifty on 30 minute chart

This is 30 minutes time bar chart of Nifty covering bounce after 10534 which I marked as start of wave [A or 1] on 5 hourly chart.

It seems wave [A or 1] completed from 10534-10923, [B or 2] completed from 10923-10628 and wave [C or 3] is in progress. Normal 100%-123% projection for wave [C or 3] is placed at 11017-11108 which is not achieved yet.

Within wave [C or 3], It seems inner wave (a or 1) completed from 10628-10870, (b or 2) may be completed from 10867-10692 and wave (c or 3) may be completed at 10987 or still in progress. Wave (c or 3) already achieved normal 100%-123% projection after entering 10934-10990 range.

Important Observation: – Wave [C or 3] is already slower than wave [A or 1] and not achieved 100% projection yet, whereas inner wave (c or 3) of [C or 3] also took more time than time taken by wave (a or 1) to achieved its 100% projection.

Wave (3) is normally known to be faster than wave (1), so this slower wave (c or 3) is indicating the possibility of wave (c) rather than (3) and if it is (c) then it will form Irregular correction and Nifty can decline sharply towards 10628.

So, this slower wave [C or 3] followed by slower (c or 3) is creating confusing and warning cautions. Nifty needs to bounce extra ordinary fast to move further higher otherwise cautions for decline towards 10628 are still there.

38% retracement of wave (c or 3) is placed at 10874 and same was sharp breakeven point. This breakeven point is already broken and Nifty if breaks and stay below 10874 for 15 minutes can result in further decline towards 10692-10628.

Now, let’s analyse the progress of decline started from 10987 on lowest possible time frame.

Elliott wave analysis of Nifty on 5 minute chart

Elliott wave analysis of Nifty on 5 minute chart

This is 5 minute time bar chart of Nifty covering decline after 10987 which I am expecting as a start of small or big corrective pattern.

It seems an impulse is completed from 10987-10864 and same can be marked as wave (a or 1). Wave (b or 2) already achieved minimum 38% retracement whereas next 61%-78% retracement is placed at 10940-10960.

We can expect one more decline of 100-120 points [100%-123% projection for wave (c or 3)] if I am right at identifying the pattern.

Conclusion

For Medium/Long Term: – There is no change in medium term outlook, Nifty is at a point where either a fall towards 10692-10628 or a big and sharp bounce toward 11700 is expected. Most of the conditions are indicating fall towards 10628 and Nifty needs to bounce extra ordinary fast to move higher.

Slower wave [C or 3] followed by slower (c or 3) is creating confusing and warning cautions. Nifty needs to bounce extra ordinary fast to move further higher otherwise cautions for decline towards 10628 are still there.

For short term: – Nifty is in short term negative zone with 10940-10960 as immediate resistance. Nifty can give one more decline of 100-120 points without breaking higher above 10960.

On downside, Nifty if breaks and stay below 10874 for 15 minutes can open the possibility for decline towards 10692-10628.

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

Trading Points of View:

According to the conditions on charts: –

Small risk can be taken to sell Nifty if get in 10940-10960 range using exact stoploss of 10963 expecting decline of 100-120 points. Hold for next day only if Nifty closes below 10874 and near low of the day.

Trade with strict stoploss because bounce can be sharp and big if I am wrong at identifying the pattern. This is low risk trading strategy I can suggest in such conditions, otherwise traders can plan their own trade based on the conditions explained above.

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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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