Elliott Wave Analysis Report of Nifty for 27 Oct 2014

October 27, 2014

Nifty is rising continuously with Gaps after touching the low of 7724 and bounced almost 300 points from low in 4 sessions.  I calculated rough targets of 8042 in previous report when was at 7927 and Nifty given high of 8031 till now for last impulsive. This report is going to explore further possibilities.

So, let’s start the analysis after June 2014 Low of 7118 that I am expecting as Ending Diagonal on Chart 1

Chart 1

This (Chart 1) is daily chart of Nifty covering move from 7118 that I am expecting the start of wave 5 of impulsive started from 5933. Read Elliott Wave Analysis of Nifty for All time Frames Dated 18 Oct 2014 for details structure of this ED.

Wave 4 of progressing Ending Diagonal was a complex correction (triple zig zag) progressing as Contracting Triangle and Nifty bounced sharply after completion of this complex correction exactly at lower line of Triangle and is continue in rhythm with Gaps till now, which is last wave (5) of this ED before another big correction.  Read the chapter “Extended Waves” and “Alternations” of book “Practical Application of Elliott’s Wave Principles by Deepak Kumar” to examine why I am expecting 61% extension of wave (5) of Ending Diagonal (ED)

The last wave (5) of ED started from 7724 is expected to be a 3 wave’s (ABC) move that can go till 61% extension placed at 8380. And present bounce till 8031 can be expected as progress of wave A of ABC.

Some of my subscribers asking me, why I am expecting move from 7118 as ED as there may be end of wave 5 at 8180. So, let me show you the chart of bigger time frame first (Chart 2).

Chart 2

Take a look at wave (2) in (chart 2) started from 5118 marked in blue rectangle. The move from 7118 in Chart 1 is wave lowest degree wave 5 of lower degree wave (iii) of wave (3) started from 5118. You can see that internal wave (iii) of (3) is still in rhythm and still the steepest wave and there is identification of Ending Diagonal at the top. Read the topic “Personality and Calculation of Wave 3”. That ED like structure at the top is the wave I shown closely on Chart 1. I also place the Fibonacci Ratio for wave (iii) at the top. Wave (iii) of (3) already extended till 170% and next Fibonacci Ratio is 200% and the levels placed at 8388. Just remember, this 200% extension of wave (iii) (8388) matches with the 61% extension (8380) of last wave (5) of ED shown on chart 1.

Note: I am not betting that it is an Ending Diagonal, I am just going with probabilities after investigating wave’s structure. Waves can change pattern anytime.

See the Chart 1 again, Even if the move shown from 7118 is not an Ending Diagonal and I am wrong in identifying then also nifty is expected to break at least 8180 as the move from 8180-7724 can be seen as correction. And you can always expect next wave above the start of correction again. There are very rare possibilities of this move from 8180-7724 in Triangle formation as wave 1 or wave A (Leading Diagonal) as internal structure of this triangle seems 3-3-3-3-3.  Read my previous report Elliott Wave Analysis of Nifty for All time Frames Dated 18 Oct 2014 to see the internal structure of move from 8180-7724.

Also observe in (Chart 1): See the personality of wave after breakouts from long complex corrections unfolded as triangles. Breakouts after long complex corrections are marked in small red circles on (chart 1). First breakout is after a complex correction unfolded as Expanding Triangle and latest breakout is after a complex correction unfolded as Contracting Triangle. Just read the topic “Complex Corrections” and see what I mentioned about the personality of next wave after long Complex Correction. That is the reason why I am expecting higher levels now.

Now, let us see the last bounce from 7724 closely on Chart 3

Chart 3

This (Chart 3) is 15 minutes time bar chart of Nifty covering move after the low of 7724 which I am expecting the wave A of ABC move for last wave (5) of Ending Diagonal. As you now, wave A is an impulse consist of 5 waves.

Here in this chart, I am not showing any wave counts but taking the help of “Personality of Waves”.

I am considering move from 7724 to latest high 8031 as progress of wave 3 of A by seeing rhythm and continuous gaps. I can’t say about any big correction unless I see a slow wave upside after these Gaps. A correction of 23%-38% is expected in between followed by 38%-61% move upside. Means After completion of this wave 3, a correction of 23-38% for wave 4 followed by wave 5 upside 38-61% extension to complete wave A. After completing wave 5, again a reasonable correction can be expected for wave B.

For Intraday trades, watch 5 minutes time bar chart and wait for the identification of ABC correction to buy with small stoploss. Never trade unless you identify convincing ABC correction downwards. And remember, Nifty already bounced 300 points from low, so 23% to 38% correction would be 70 to 130 points. See the chart below how I identified ABC correction on 5 minutes chart on 22 Oct 2014.

Elliott Wave Analysis of Nifty

This chart I posted on my face book timeline during live market hours on 22 Oct 2014. Nifty already shown 8030 and 61% of wave 5 is placed at 8049. So, there are cautions for some correction near 8049 and above, either minor correction or big.  We need to wait to see next move on Monday during live market for fresh trade.

Category: Nifty