Elliott Wave Analysis Updates of Nifty for 10 May 2016

| May 9, 2016

This Elliott Wave analysis report of Nifty for 10 May 2016 I am publishing here as the latest updates for my previous analysis report published here. Click Nifty Can Bounce above 7992 again in Near Term – Elliott Wave Analysis to read my last report.  This analysis report is 100% same as I sent to my clients/subscribers.

Nifty opened gap up today at 7755 and traded with huge strength for rest of the day. Nifty bounced about 140 points from previous close before closing 132 points up at 7866.

We expected a very sharp rise till 7840-7890 and we witness the same today. 7800-7900 calls suggested to buy in 7697-7657 range are more than double from Friday low (from our entry levels). Let’s have a fresh look at latest charts for further scenario.

Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Analysis Report of Nifty for 02 May 2016.

Elliott Wave Counts of Nifty for 10 May 2016

Elliott Wave Counts of Nifty for 10 May 2016

This is hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825.

Conditions are favoring the possibility of formation of Ending Diagonal (ED) on this chart after 7405 which I also mentioned in my previous analysis report. It may be wave (4) completed at 7405 followed by wave (5) is in progress as Ending Diagonal where: –

  1. Inner wave (i) completed from 7405-7777 as (abc)
  2. Wave (ii) completed from 7777-7517 as Simple Zigzag (abc)
  3. Wave (iii) may be completed from 7516-7978 as (abc)
  4. Wave (iv) may be completed from 7978-7678 as Irregular Correction
  5. Last wave (v) may be in progress which must be completed as (abc) pattern and need to project minimum 61%. So, 61% projection of wave (v) of ED is placed at 8032 which must be the minimum target if we are right at identifying the pattern.

And again if we are right at identifying the pattern and it is really Ending Diagonal going on from 7405 then we can see a very sharp decline/crash of minimum 500-600 points after completion of this ED above 7992.

Now let’s have a look at progress of inner wave (v) of Ending Diagonal Triangle started from 7678 on 5 minutes chart.

Elliott Wave Counts of Nifty for 10 May 2016

Elliott Wave Counts of Nifty for 10 May 2016

This is 5 minutes time bar chart of Nifty covering move from 06 May 2016 low 7678 which I am expecting as start of inner wave (v) of (5) progressing as Ending Diagonal Triangle Pattern.

The bounce from 7678 looks like an impulsive move which is within wave (3) as shown on chart. And if we look at inner waves of wave (3) then it is within its inner wave (v).

Wave (3) started from 7689 where inner wave (iii) of (3) completed at 7843, (iv) completed at 7816 and last wave (v) is in progress. Minimum 38%-61% projection for wave (v) is placed at 7874-7911.

And if we look at inner waves of wave (v) of (3) then it seems within its inner wave 4 and 38%-61% projection of next wave 5 of (v) of (3) is placed at 7882-7896.

So, wave (3) may complete somewhere around 7882-7911 followed by a decline of 50-80 points as wave (4). 38% retracement of whole wave (3) is placed at 7802, so trailing stoploss for positional/fresh longs must be some points below 7802.

Conclusion:

Nifty bounced sharply till 7840-7890 range as we expected. Today’s high was 7873 and there is some more upside left to complete this impulse. There can be some pass and correction of 50-80 points from 7882-7911 range followed by bounce again. Stoploss for any existing and fresh longs must be some points below 7802.

Safe strategy is still buying on dip until we identify the completion of upside impulse. Any decline towards 7802 may be used a fresh buying opportunity with stoploss of 7779. Some experience traders can also initiate intraday shorts for 50-80 points if able to identify the completion of wave (3) around 7882-7911 range with strict stoploss.

7800-7900 Call options taken in light quantity on Friday in 7697-7657 range are more than double now. So, some profit booking should be done to lock profit and renter again on next opportunity.

For medium term, if I am right at identify the pattern then Nifty can once achieve 8032 with up-down-up swings followed by a sharp decline/crash of minimum 500-600 points. It will be confirmed later after seeing the pattern.

Any trade can be decided based on above mentioned conditions using strict stoploss.

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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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