Elliott Wave Analysis Report of Nifty for April 2018 Expiry Week

| April 24, 2018

Nifty opened higher at 10592 and declined sharply after opening to register day’s low 10553 but bounced again by more than 80 points from low to register new day’s high 10638 and closed 20 points down at 10584. (Today’s low based on data is 10514 but actual low on chart is 10553, this will be the confusion for time being).

Yesterday, short term outlook was bullish with 10480-10409 as short term support range but an immediate decline towards this support range was expected.

Trading strategy was to hold Nifty puts of April Expiry (bought on Wednesday) with changed stoploss of 10594 for minimum target 10472. Nifty again failed to achieve minimum target 10472 and stoploss of 10594 was triggered. Now, let’s have a fresh look at latest charts for further scenario.

Today I am covering decline after all time high 11171 and earlier wave counts are explained in my last All Time Frames analysis report Nifty is Still Bullish for Medium and Long Term – Fresh EW Analysis on All Time Frames

Elliott wave counts of nifty on 5 hour chart

Elliott wave counts of nifty on 5 hour chart

This is 5 hourly time bar chart of Nifty covering decline from all time high 11171 which I had marked as end of inner wave (b) of {iv of 3 of [v] of [3] of (iii) of (3)} on larger time frame. 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.

It seems wave (1) completed at 10979, (2) completed at 11117, (3) completed at 10276, (4) completed at 10637 and wave (5) may be completed at 9951 or still in progress.

Wave 5 achieved 61%-100% projection and already a highly extended wave but its pattern is not clear. So, we can’t say confidently if wave 5 completed or still in progress. If wave 5 is already completed then 38%-61% retracement of this whole impulse (from 11171-9951) is placed at 10417-10704. Nifty achieved 10594 till now.

Now, we are not confident if downward impulse already completed at 9951 or still in progress. So, we need to concentrate on progress of bounce started from 9951 to calculate immediate further moves.

Elliott wave counts of nifty on hourly chart

Elliott wave counts of nifty on hourly chart

This is 1 Hour time bar chart of Nifty covering bounce after low 9951 which I am analyzing independently.

Again, there is no change in wave counts on this chart. It seems wave (A or 1) completed from 9951-10229, wave (B or 2) completed from 10229-10111 as Irregular Correction and wave (C or 3) may be completed from 10111-10594 or still in progress.

Within wave (C or 3), it seems inner wave (iii) completed at 10519, (iv) completed at 10396 and (v) may be completed at 10594 or still in progress. Wave (v) already achieved minimum 38% projection after breaking above 10551 and next 61% projection is placed at 10648 which may or may not be achieved.

There is small correction from 10594 to 10509 and pattern of later bounce after 10509 is 3 wave’s move and pattern not completed yet. There is still a possibility if Irregular Correction at top started from 10594, so we must calculate retracement with respect to 10594.

So, 23%-38% retracement of progress of wave (C or 3) is placed at 10480-10409 (calculated with respect to 10594). So, 10480-10409 is still short term support on downside and 10409 is breakeven point below which we can expect further decline.

Let’s have a separate look at decline from 10594 on lowest time frame to calculate immediate levels.

Elliott wave counts of nifty on 15 minute chart

Elliott wave counts of nifty on 15 minute chart

This is 15 minute time Bar chart of Nifty covering decline from high 10594 which I am expecting as the start of small or big correction after completion of wave (C or 3).

The decline from 10594-10509 is very sharp which generally looks like a 3 wave’s move I marked as wave (a), (b) and (c).

Later bounce after 10509 is also a 3 wave’s move till now which I marked as wave (A or 1) from 10509-10568, (B or 2) from 10568-10527 and wave (C or 3) may be completed from 10527-10638 or still in progress.

End of wave (A or 1) is 10568 which is breakeven point. Breaking below 10568 can turn the whole pattern started after 10594 as Irregular Correction (3-3-5 pattern). And this Irregular Correction can complete somewhere between 10509-10409 followed by bounce above 10638 again.

Within the decline from 10638, again the move is still 3 waves which I marked as wave (a or 1), (b or 2) and (c or 3). 38% retracement of wave (c or 3) is placed at 10591, so same 10591 is immediate breakeven point on upside above which further bounce for new high above 10638 is expected.

Conclusion:

For long term, Nifty is still bullish and has long way to go as explained in my last “All Time Frames” report but we are not sure if bottom is already made or still pending. Nifty can bounce from present levels also and Maximum estimated bottom range is 9800-9600 based on Fibonacci retracements.

For short term, 10480-10409 is still immediate support range on downside and Nifty has possibility to bounce sharply from this support range for new high above 10638.

There is possibility of Irregular Correction at top and this Irregular Correction needs to complete somewhere in 10509-10409 range if it has to happen. So, this condition is indicating 10509-10409 as good support range for sharp bounce towards 10638.

10591 is immediate breakeven on upside. Breaking straightway above 10591 can initiate further bounce for new high above 10638.

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

Trading Points of View:

We expected a 120-180 points decline from 10592-10652 range and bought April Put on last Wednesday expecting the same decline. But Nifty consolidated in 10594-10509 range for 3 sessions to form a complex pattern and our modified stoploss triggered. Nifty still has possibility for this decline but with fresh Irregular Correction pattern at top.

Now for fresh trade, 10509-10409 is fresh overall support at downside for possibility of sharp bounce above 10638 in coming days. 10509-10409 is big range and we can’t calculate exact small range at this point of time.

So, suitable Calls of May Expiry can be bought if get Nifty in 10509-10409 range expecting minimum target 10638 in coming days. Or experienced traders can buy Nifty Future strategically in 10509-10409 range with stoploss some points below 10409 or can plan hedge trade keeping 10509-10409 as support range and 10638 as minimum upside targets depends upon their capital limit and risk tolerance.

Low Capital or inexperienced traders can buy calls or wait for decline near breakeven point 10409 to initiate trade in Nifty Futures because support range and stoploss is big.

Wait for next opportunity if Nifty bounces without touching 10509. Nifty if breaks straightway above 10591 without breaking below 10568 then further bounce above 10638 is possible. So, one can also buy Intraday above 10591 with stoploss of 10567 if this condition matches.

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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"