Nifty opened mild gap at 8708 but failed to sustain at higher levels and traded with negative bias for rest of the day. Nifty declined about 50 points from day’s high to register day’s low 8652 followed by a sharp bounce before closing 6 points negative at 8693.
Friday, there was no exact trading strategy suggested because calculations were suggesting minimum target at 8727 and stoploss 8668, so there was no risk reward and even if break below 8668 then also the upside pattern will be incomplete and there were no downside targets. Overall conditions were suggesting a very narrow range where it was not safe to decide a trade in advance. And same happened on Friday, Nifty trade in narrow range of 50 points without any clear direction. Let’s have a fresh look at latest charts for further scenario.
Today I am covering decline from yearly high 8968 whereas previous wave counts are explained in my previous analysis report Elliott Wave Updates of Nifty for 18 Oct 2016.
This is 30 minutes time bar chart of Nifty covering decline from 8968. Again I am not making any wave counts on this chart but just showing the structure of this move without calculations.
There is overlapping of waves within this decline which generally indicating it as some type of Corrective pattern, may be complex correction pattern. And if the pattern of decline from 8968 is actually corrective then Nifty have to register one more high above 8968 sooner or later but cannot say from where or by which pattern.
And if you look carefully at lines drawn on chart then upper line is broken (marked by circle) but price again entered below the line, which indicates that either this pattern is not “Triple Zigzag” OR it is not yet completed if it is progressing as Triple Zigzag.
Overall from this chart, high above 8968 is expected in coming day’s/weeks but we can’t conclude if from present levels or after registering a new low below 8506. So, we need to concentrate on very last bounce from 8506 to prepare further trading plans.
This is 5 minutes time bar chart of Nifty covering bounce after 17 Oct 2016 low 8506.
The inner waves of first bounce from 8506-8594 are not clear but it can be wave (A) or (1) because next bounce from 8570 is bigger, sharper and carrying the personality of wave (C or 3).
If we look at bounce after 8570 then it looks like progress of an impulse with inner wave (i) from 8570-8596, (ii) from 8596-8587 and (iii) may be completed from 8570-8698 but the whole pattern after 9698 looks like a combination of repeated (abc) waves, please read the chart carefully.
So, either this whole pattern after 8698 is progressing as complex correction or it is Ending Diagonal Triangle in progress from 8637 and both the conditions are indicating a high above 8727 sooner or later.
Casual Calculation wise, 100%-123% projection for inner wave (iii) in case of ED is placed at 8742-8763 where 100%-123% projection for next (abc) cycle in case of Complex Correction is placed at 8628-8611.
And breakeven point or stoploss in present conditions is coming at 8676 which is top of wave (a or 1), but please understand that this stoploss doesn’t means that you have to trade with that. This stoploss 8676 I just mentioned to show the learners that how stoploss can be calculated according to present conditions but it needs favorable conditions and minimum targets with good risk reward to trade with that.
The decline from all time high looks like some sort of complex correction and inner waves of this bigger complex correction are showing the signs by making confusing moves and retracing/projecting abnormally. Conditions are very difficult for any positional trade as waves are changing every next day and it needs continuous supervision on waves during market hours to manage trades.
Overall conditions are suggesting a new high above 8968 sooner or later but we can’t conclude if straightway from here or after registering new high below 8506. We need to wait for perfect entry levels with exact stoploss which Nifty may show sooner.
For short term again, Nifty is not suggesting any reasonable signs of big move at present. Range as per casual calculation is very narrow and pattern in progress is complex right now. We need to wait for the confirmation of a particular pattern to make further trading plan.
Upside range as per calculations is coming at 8727-8764 and downside range is coming at 8652-8611 where as breakeven point as per present conditions is 8676. These levels are not to trade because pattern is complex and can take any shape, these levels are just for reference in case Nifty shows any clear pattern tomorrow during market hours.
For Trading Point of View: –
No safe trade with exact entry levels and stoploss can be decided at this moment because pattern is complex and there is no risk reward. And trade for 40-50 points can be done during market hours after identifying small patterns but cannot be decided in advance. Opportunities for small trade can be identified during market hours only.
Safe traders can wait for 1-2 days as Nifty will give a good trading opportunity soon in couple of days. Save your capital for perfect low risk opportunity.
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