Elliott Wave Analysis Update of Nifty on All Time Frame as on 22 Jan 2018

| January 21, 2018

Nifty registered new all time high 10906 on Friday, 19 Jan 2018 and bounced more than 800 points in last 8 weeks. Though, there is no change in long term wave counts but still I am preparing a fresh All Time Frame analysis report because last all time frame analysis report I prepared in Aug 2017 and many of my clients and followers are asking about further possibilities of Nifty at these higher levels.

So, today I am revising wave counts on all time frames to conclude the further possible road map of Nifty in Long, Medium and Short Term. Let’s start with a monthly chart covering life time move of Nifty.

(Friday, 10827 was immediate breakeven point on upside and I expected minimum bounce towards 10887-10917 if breaks above 10827 but with cautions at higher levels. Trading strategy was to exit Jan 10700-10800 puts (if someone holding) at 10827 but no other trade was suggested. Nifty bounced above 10887 to registered new life time high 10906 as expected.)

This analysis is further update on my last “All time Frame” report Fresh Elliott Wave Analysis of Nifty on All Time Frames as on 14 Aug 2017

Elliott wave analysis of Nifty on Monthly Chart

Elliott wave analysis of Nifty on Monthly Chart

This is monthly time bar chart of Nifty covering life time move of Nifty. It seems Major wave (1) is completed at 6357, (2) completed at 2252 and (3) may be in progress from 2252.

Within wave (3) started from 2252, it seems inner wave (i), (ii) is complete and (iii) in progress from 4531.

And with wave (iii) started from 4531, it seems inner wave [1], [2] is complete and [3] in progress from 5118.

And with wave [3] started from 5118, it seems inner wave [i], [ii], [iii], [iv] is complete and [v] in progress from 6825.

Overall, Nifty is somewhere in the middle of major wave (3). So Nifty is still in the long term bullish trend and there is long way to go for Nifty with occasional corrections.

The waves are clear till 6825 on this chart. So, we need to analyze the move after 6825 on lowest possible time frame which is the end of inner wave {[v] of [3] of (iii)} of larger (3).

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 from 6825 which I am expecting as start of wave {[v] of [3] of (iii)} of larger (3) on monthly chart.

It seems inner wave 1 of [v] completed from 6825-8968, 2 completed at 7893 and wave 3 may be in progress.

And within wave 3 started from 7893, there is small but identifiable correction from 10137-9687. This correction can be inner wave (iv) of 3 and wave (v) of 3 may be in progress from 9687.

Minimum 38%-61% projection for wave (v) of 3 is placed at 10554-11073 whereas 10554 is already achieved and Nifty registered the high of 10906.

Normal 23%-38% retracement of progress of wave 3 is placed at 10194-9755. So, 10194-9755 is medium/long term support and 9755 is the medium/long term breakeven point below which we can think of any bigger reversal.

Now, we need to analyze the progress of wave (v) of 3 started from 9687 separately on lowest time frame chart for more clarity and identification of its pattern.

Elliott wave analysis of Nifty on 5 hourly Chart

Elliott wave analysis of Nifty on 5 hourly Chart

This is 5 hour time bar chart of Nifty covering bounce from low 9687 which I marked as start of wave (v) of 3 on Daily Chart. There are two different possibilities on this chart.

In general it seems, wave (1) completed from 9786-9945, (2) completed from 9945-9881, wave (3) may be in completed from 9881-10490, wave (4) may completed at 10033 and wave (5) may be in progress. Most of the visible structure is favouring this pattern.

But wave (5) already achieved 100% projection placed at 10836 and next 123% projection is placed at 11073. Though, wave (5) projecting more than 100% is possible and there is no upper limit but it is rare. So, there arises the 2nd possibility.

Second Possibility:

There is a possibility that, it is wave (1) completed from 9687-10490 (pattern is not clear), Wave (2) completed from 10490-10033 and wave (3) started from 10033 which achieved minimum 100% projection after breaking above 10836.

23%-38% retracement of progress of wave (3) in this case is placed at 10699-10572. So, 10699 is the support on downside and 10572 is the breakeven point below which we can think of any reversal.

Outcome of Both the Possibilities:

  1. If it is wave (5) started from 10033 then it is already highly extended. So, we can expect some correction after completion of wave (5) and correction can also be sharper towards 10033 because it is the start of highly extended wave (5). But again, this wave (5) is inner wave of 3 so “rule of extended wave 5” is not completely applicable here.
  1. If it is wave (3) started from 10033 then also there is scope for 23%-38% correction after its completion as wave (4). 23%-38% correction is about 200-350 points.

So, we will concentrate on the progress of Impulse started from 10033 for short term. No matter if this impulse started from 10033 is wave (5) or (3), there is scope for minimum 200-350 points correction in both the cases after its completion and further move we can calculate later if correction happens.

Now for short term, it is important to concentrate on the Impulse started from 10033 and to identify its completion to plan next trades.

Elliott wave analysis of Nifty on hourly Chart

Elliott wave analysis of Nifty on hourly Chart

This is hourly time bar chart of Nifty covering bounce from 10033 which I am expecting as progress of wave (5 or 3) of (v) on 5 hour chart.

It seems inner (i) of (5 or 3) completed from 10033-10329, wave (ii) may be completed from 10329-10074 as Irregular Correction, wave (iii) may be completed from 10074-10552, wave (iv) completed from 10552-10404 as Simple Zigzag and wave (v) may be in progress.

Wave (v) already achieved normal 61% projection after breaking above 10724 and next 100% projection is placed at 10923. Wave (v) projecting above 100% is possible but a rare case. Nifty achieved 10906 till now.

And within wave (v),

it seems inner wave [1] of (v) completed from 10404-10503, [2] completed at 10429, wave [3] may be in completed at 10782, wave [4] may be completed at 10667 as Double Zigzag Correction and [5] may be in progress.

Wave [5] already achieved minimum normal 61% projection after breaking above 10900 and next 100% projection is placed at 11045 which may or may not be achieved.

Now we need to check the pattern of expected wave [5] started from 10667 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 minutes time bar chart of Nifty covering bounce from 10667 which I am expecting as start of wave [5] of (v) of (5 or 3) on 30 minutes chart.

It seems wave [i] of [5] completed at 10735, [ii] completed at 10715, [iii] may be completed at 10887, [iv] may be completed at 10782 (wave [iv] retraced deeper than 38%] and wave [v] may be in progress.

Here again, wave [5] already achieved minimum requirement after breaking above 10887 and next 61%-100% projection is placed at 10917-11002 which may or may not be achieved.

And within wave [v],

It seems inner wave 1 and 2 is completed and 3 is in progress from 10795. 23%-38% retracement of progress of wave 3 is placed at 10879-10863. Thus, pattern of wave [v] is not yet completed because it is still in its inner wave 3.

So, 10879-10863 is the immediate support on downside and Nifty is still positive as long as trading above 10863. Any short term reversal can be seen only if break below 10863.

Note of Learners:

Many of my students ask “which time frame to use for Elliott Wave Analysis” or “where to take the start of a wave” or “how to identify the start of wave”.

Please look at last 5 minute chart carefully. There is an end of some sort of wave 2 at 10795 and same end of wave 2 is the start of wave 3. Now if you combine the wave counts of all the charts then you will find that: –

The wave started from 10795 is the start of inner most/lowest degree wave 3.[v].[4].(5 or 3).(V).3.[V].[3].(iii).(3) in major wave cycle. Or you can say it is start of wave {3 of [v] of [4] of (5 or 3) of (V) of 3 of [V] of [3] of (iii)} of major wave (3). Even if you analyze last wave 3 started from 10795 on 5 minutes chart, you can break down into more inner waves.

I am explaining this breakdown of wave counts just to make you understand some important point where most of the learners make mistakes: –

  1. Every high and low on any time frame chart is a start of some sort of small of big wave. You need to identify which wave started from a particular point.
  1. No wave is independent. Every single wave on any chart is a part of major wave cycle, same as I explained that 10795 is start of wave {3 of [v] of [4] of (5 or 3) of (V) of 3 of [V] of [3] of (iii)} of major wave (3).
  1. And there is no particular important time frame to use for Elliott Wave Analysis. We need to analyze all the possible time frame charts to very last identifiable wave. And selection of charts to be done on the basis of waves clarity and not on time frame, we use the lowest possible time frame chart in which we can identify pattern of a particular wave clearly.

Please take some time, you can read this report for whole week carefully and try to understand how I reached till the last wave {3 of [v] of [4] of (5 or 3) of (V) of 3 of [V] of [3] of (iii) of major wave (3)} by using 5 charts of different time frame.

Now, I don’t need to analyze all the charts every time. We need to analyze all time frames first time, later we can keep major wave counts in mind and concentrate on last inner waves until the bigger pattern changes. The same I will do in my next analysis reports, I will analyze waves from a particular points on lowest time frame charts with reference to this report.

Conclusion

For Long Term: – Nifty still have a very long way to go for long term because it is just inner wave [3] of (iii) of bigger (3) in progress and there is long way to go for completion on whole wave cycle. Though occasional corrections of 23%-38% can be there and every such correction will be the good investment opportunity.

For Medium Term: – Medium Term trend is also bullish as long as Nifty is trading above 9755. We need to look at wave counts again if breaks below 9755. This outlook is not so important at this point of time because it is not going to help deciding trade.

For short term: – Short term waves at upper end has already completed their minimum requirements and even the waves are highly extended, so cautions for about 200-350 points decline is always there at higher levels.

Pattern of very last upside wave is not yet completed, so more bounce for higher levels is possible with immediate support in 10879-10863 range and 10863 as breakeven point.

11002-10073 is the range where most of the important projections are meeting. So, we can plan a good positional hedge trade if we get Nifty in this range. Otherwise we need to wait for a clear pattern.

Investment and Trading Point of View:

For investment,

Some of my clients use my reports to take investment decisions in stocks. If your are investing in stocks then entry and exit decisions in stocks should be made by seeing the charts of particular stocks and not based on Nifty. Some stock can move 100%-200% on the 5% move of Nifty and some can go opposite to it.

On the other hand, my daily reports covers short term outlook most of the time unless any bigger pattern changes. So, making investment decisions on short term outlook is not safe, mainly if you are exiting your portfolio after seeing the possibility of small or big correction in my report. The correction expected in my report may be of just 100-300 points which may not affect good stocks.

Otherwise, charts are indicating much higher levels in Nifty on long run. So, good stocks which didn’t start its major wave 3 yet or in the start of major wave 3 have immense possibility for good returns.

For Intraday or short term,

Nifty has possibility to bounce further with immediate support at 10879-10863 range. But upper range cannot be calculated because waves already achieved normal projections.

So, intraday longs can be initiated if decline towards 10879-10863 with stoploss of 10857 (some points below 10863) for target of new life time high. But avoid holding naked longs overnight because there are cautions for 200-350 points correction any time.

Otherwise wait for best opportunity to initiate a confident low risk high reward trade.

Those who wants this analysis report in PDF format by email can send me email at sweeglu@gmail.com. I will send it by email by tomorrow.

BANK NIFTY ANALYSIS

“Elliott Wave Analysis Reports of Bank Nifty” with “Bank Nifty Weekly Options Trading Strategies” Daily is also provided by one of my personally trained student Vinod Sharma on his website http://www.ewanalyst.com/ . Links to some of his analysis Reports are: –

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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"