Elliott Wave Analysis Updates of Nifty for 04 Aug 2016

| August 3, 2016

Nifty opened flat today at 8635 but failed to sustain at higher levels and traded with negative bias for rest of the day. Nifty declined more than 100% points from day’s high to register day’s low 8529 before closing 78 points down at 8544.

For today, decline till 8566-8537 was expected without breaking above 8650 and trading strategy was to hold shorts taken yesterday at 8646 with modified stoploss of 8650 expecting downwards targets 8566-8537 and further advised to protect profit or trail stoploss when Nifty break below 8566. Nifty achieved targets range 8566-8537 without triggering stoploss, overall trade was giving about 120 points profit taken with 30 points risk. Let’s have a fresh look at latest chart now.

Today I am covering move from 29 Feb 2016 low 6825 and previous waves counts are explained in my all time frames report Elliott Wave Counts of Nifty for All Time Frames as on 18 July 2016.

Elliott Wave counts of Nifty for 04 Aug 2016

Elliott Wave counts of Nifty for 04 Aug 2016

This is daily time bar chart of Nifty covering move from 29 Feb low 6825.

By casual look it seems an impulse completed from 6825-7992 which could be wave (A or 1), decline 7992-7678 may be wave (B or 2) and wave (C or 3) may be in progress from 7678.

Minimum 61% projection for wave (C) is placed at 8399 which is already achieved and minimum 100% projection for wave (3) is placed at 8845. Inner wave (C or 3) seems within its inner wave (3) and we can expect a 23%-38% (230-380 points) correction after completion of wave (3) started from 7715.

23%-38% retracement calculated from recent high 8711 is placed at 8475-8330 where Nifty decline till 8529 as of now. This 23%-38% is just indicative value and clearer scenario and levels can be calculated only by seeing the pattern of decline. So let’s have a separate look at decline for high 8711 on 5 minutes chart.

Elliott Wave counts of Nifty for 04 Aug 2016

Elliott Wave counts of Nifty for 04 Aug 2016

This is 5 minutes time bar chart of Nifty covering decline from 02 Aug 2016 high 8711.

The sharp decline from 8711-8590 looks like an impulse which could be either wave (A) of (1), (abc) bounce from 8590-8687 which could be wave (B) of (2) and further wave (C) or (3) may be in progress from 8687. Wave (C or 3) projected 123% after breaking below 8537.

And if we look at progress of wave (C or 3) then it seems its inner wave (3) completed at 8545 and (4) or (5) in progress. 38% retracement of wave (3) is placed at 8599 so stoploss for any shorts must be above 8599 now. And, if wave (4) is already completed at 8584 then minimum 38%-61% projection of wave (5) is placed at 8528-8495.

The last decline from 8584-8529 doesn’t looks like a complete wave, rather it looks like a 3 waves (abc) move. So, there are still indications of a new low below 8529 so we need to focus on next move carefully.

Conclusion:

Nifty achieved 8566-8537 we expected in yesterday report but very last decline from 8584-8529 doesn’t looks like a complete impulse. So a possibility for new low below 8529 is still possible and we need to focus on next move carefully. Stoploss for any Existing or Fresh shorts must be 8601 (2 points above 38% retracement 8599).

For trading points of view, Stoploss for any existing shorts must be 8601 now even and small risk can be taken to initiate fresh shorts if get Nifty in 8584-8599 range with small stoploss of 8601 expecting targets below 8529 again.

8601 is just the stoploss for longs and not the breakout point to go long. Just exit shorts if Nifty break above 8601 and look at the fresh pattern to initiate next trade. Keep strict stoploss of the trades.

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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"

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