Elliott Wave Analysis Updates of Nifty for 05 Feb 2018 Onward

| February 5, 2018

Nifty opened huge gap down at 10938, registered day’s high 10954 but declined further and traded with huge negativity for rest of the day. Nifty decline more than 280 points to register day’s low 10736 and closed 256 points down at 10760.

Friday, overall outlook I mentioned was bullish with 10878-10736 as good support on downside and decline towards 10878-10736 was suggested as buying opportunity. But stoploss and support range was very big, so trade was suggested either in Feb Options or advised to wait for the stability in market.

But Nifty declined by more than 280 points and Nifty registered low 10736. Any trade done in Nifty Feb calls may be in loss. Let’s have a fresh look at latest charts for further scenario.

This analysis is covering bounce from low 9687 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 2018

Elliott wave counts of nifty on 5 hourly chart

Elliott wave counts 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.

Normal it seems, wave may (1) completed from 9687-10490 (pattern is not clear), Wave (2) completed from 10490-10033 and wave (3) in progress from 10033 which already achieved minimum 123% projection after breaking above 11025 and next 161% projection is placed at 11332 which may or may not be achieved.

Within wave (3), it seems inner wave (i), (ii) is already completed and (iii) may be in progress. And within wave (iii), it seems inner wave [1], [2] , [3] may be completed till 11171 and wave [4] or [5] may be in progress.

But inner wave [3] retraced way deeper than 38% after breaking below 10878 and even whole wave (3) started from 10033 retraced 38% after touching 10736. These deeper than normal retracements are warning cautions and causing low confidence in pattern.

So, we need to concentrate on the pattern of decline started from all time high 11171 for time being to calculate further short term move.

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 all time high 11171 which I marked as the start of wave [4] on 5 hourly charts.

It seems wave (a or 1) completed from 11171-10979, wave (b or 2) may be completed from 10979-11117 as big Irregular Correction and wave (c or 3) may be in progress from 11117.

Within wave (c or 3), it seems inner wave (1), (2), (3), (4) is already completed and (5) may be in progress. Wave (5) already achieved minimum 38% projection after breaking below 10772 and next 61%-100% projection for wave (5) is placed at 10704-10594. 100% projection 10594 is rare case.

23%-38% retracement of progress of wave (c or 3) is placed at 10825-10881, so 10825-10881 is immediate resistance on upside and 10881 is the breakeven point above which we can think of any reversal.

Conclusion

Nifty declined very sharply on Friday by about 280 points and almost broken support range of 10878-10736. Now, this deeper than normal retracement is causing low confidence in pattern, so we need to concentrate on short term moves by analyzing decline from 11171.

For short term, downward wave (c or 3) already achieved its minimum requirements after breaking below 10772 and may extend towards 10704 or bit lower. Nifty can give very short term bounce of 80-130 points after completion of wave (c o 3) somewhere around 10704.

10825-10881 is the immediate resistance on upside and 10881 is the breakeven point above which we can think of any reversal.

Trading Points of View:

Nifty is trading below breakeven point 10881, so in negative zone but fresh shorts are not safe because wave (5) of (c or 3) already achieved minimum projections. Any fresh longs can planed only after break above 10881 after confirming with the pattern, we can’t plan it right now. So overall, it is safe to wait for some cool down and formation of small pattern to initiate fresh short term trade.

But, as wave (c or 3) already achieved minimum requirements and there is possibility of minimum 80-130 points bounce after completion of (c or 3). So, intraday longs can be taken if Nifty traded above tomorrow’s opening price after 9:30 AM using stoploss of day’s low (low made till 9:30 AM) and hold trade for intraday. Initiate trade only if stoploss is low and exit trade Intraday.

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"

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