Elliott Wave Analysis Report of Nifty for 27 Nov 2014

| November 26, 2014

Nifty opened mild gap down today and traded in 20 points range till mid-session but bounced sharply to 8500 in last session followed by a sharp decline till 8458 again. After giving low of 8439 and high of 8500 Nifty closed mild green at 8475. Now we need to see the charts for further road map.

Nifty Elliott Wave Analysis Chart

Nifty Elliott Wave Analysis Chart

This is 5 minutes time bar chart of Nifty covering move after 8353 which I am assuming as start of wave 5 of total move started from 7724. Now we can identify a pattern for correction on chart as labeled.

  • Move from 8353 to 8535 seems to be inner wave 1 of 5. I explained in my yesterday’s reports that why I am assuming it as inner wave 1 of 5.
  • Decline from 8535 to 8429 can be taken as wave (a) of 2.
  • Zigzag slow bounce from 8329 to 8500 can be seen as wave (b) of 2.
  • Next decline after today’s high 8500 can be a progress of last wave (c) of 2 which is able to decline sharply below 8329 but no below 8351. 

Now, Nifty is able to rise till 8631-8804 comfortably after completion of this correction or wave 2 if I am right at identifying the waves. Pattern will be negated if Nifty breaks below the start of wave 1 of 5 (8353). 

Today I updated on my Facebook Timeline that “Though I am long in Nifty with 8351.7 stop loss but I would not be surprised if Nifty decline sharply below 8329 once again, CMP 8499”. I also shorted 1 lot of Nov Nifty there. Let me show you the reason for that.

Nifty Elliott Wave Analysis Chart

Nifty Elliott Wave Analysis Chart

This is 5 minutes time bar chart of Nifty showing decline after high 8535. There is slow rise after low of 8429 on chart in ABC pattern. Possibilities for the start of wave 3 are less as the bounce is slow, so it may be corrective wave (b) after (a). Wave (b) from 8429 to 8500 also has three inner waves “abc”. 

I was identifying completion of 5 waves at 8500 in move from today’s low 8439 to 8500 which looks like inner wave ‘c’ of (b). And the whole pattern from top 8535 to low 8429 to today’s high 8500 looks like wave (a) and (b) as shown on chart. 

After identification of wave (b) we can always expect for wave (c) that can go below wave (a) (8429) again. That was the reason I updated “Though I am long in Nifty with 8351.7 stop loss but I would be surprised if Nifty decline sharply below 8329 once again, CMP 8499”. 

I bought Nifty Dec Future yesterday when Nifty spot was at 8437 but could not book partial profit today at 8500 as I traded single lot only. I don’t want to close my buying position as I don’t want to miss this opportunity, maybe I am wrong somewhere in identifying and Nifty bounce sharply after I book small profit.  But I was expecting a decline also. So, I sold one lot of Nifty Nov Future when Nifty spot was at 8500 to protect my profit and be in buying position.

Now, if Nifty declines below 8429 tomorrow then I will book profit in Nov short and double up my Dec longs. Profit from Nov Short will reduce my buying price lower and I will be in win-win situation. Otherwise stop loss for my Nov short is at 8536 spot; I will exit Nov short if Nifty bounce and break above 8535 before 8429 and will keep my Dec buying position. 

You have seen,

I explained yesterday why I bought Nifty at 8437 and today I explained how I managed my trade in my favor. Nothing is better and more accurate than Elliott Wave Theory to alert you about market moves in advance but Elliott wave analysis cannot trade for you. By your decisions and strategies, you can convert your Elliott Wave Analysis into profitable. 

Any sharp fall or bounce of 50-100 points converts many experts from bullish to bearish and bearish to bullish. Even most of technical indicators fluctuate after 50-100 point movement. Only Elliott Wave Theory indicates future moves of market in advance so that you can take decisions with confidence. 

Any sharp fall below 8429 again will scare most of the buyers but I am already expecting it and mentally prepared for it. I am still confident with my positional longs even if Nifty fall sharply below 8429 because EWT already alerted me for that. I might be wrong and my stop loss may hit but I not confused. Confidence (control over fear) is one of the important key to succeed in stock market.

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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"

Comments (4)

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  1. ashok says:

    depak Kumar
    truncated c completed at 8439 ? this is bullish.possible?

    • Deepak Kumar says:

      Dear Ashok,

      May be (b) is not completed yet and is still in progress as complex correction and (c) is still pending. Otherwise slow decline after sharp rise from 8353 to 8535 is indicating strength and bullishness only.

  2. a kumar says:

    Wave 2 complete now wave 3 of correction will start