This Elliott wave analysis report of Nifty is exactly same which I prepared and sent yesterday to my subscribers/students. I am posting it late around 9:45 AM on my website as immediate action I expected in this report is already happened (so that my paid subscriber wouldn’t object) and it can help to conclude further scenario.
Nifty opened huge gap down today at 7804 but bounced sharply after registering day’s low 7780 within 2 minutes after opening. Nifty bounced more than 110 points from low to register day’s high 7893 followed by a decline till 7820 again before closing 38 points down at 7848.
In Yesterday’s report, I expect a decline of minimum 50-80 points followed by a bounce for new high again, also mentioned to buy if get near 7816 with 7595 as stoploss. But Nifty declined more than our expectations and opened below stoploss followed by a bounce of 110 points. Wave (4) retraced more than 38% which is normal but it is impossible to predict exact levels unless we see the formation of pattern. Let’s have a fresh look at latest charts now.
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.
This is hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825.
As I explained in my previous report, 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: –
- Inner wave (i) completed from 7405-7777 as (abc)
- Wave (ii) completed from 7777-7517 as Simple Zigzag (abc)
- Wave (iii) may be completed from 7516-7978 as (abc)
- Wave (iv) may be completed from 7978-7678 as Irregular Correction
- 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.
Now, Nifty should not break below the lower line of Ending Diagonal (ED) to keep this pattern intact as shown on chart. Breaking below lower line before breaking above 7992 will negate the ED pattern. So, positional stoploss for longs must be that lower line of ED which is around 7720-7740 right now. And any decline near that lower line can be bought with stoploss below the line expecting minimum target 8032.
Now let’s have a look at progress of inner wave (v) of Ending Diagonal Triangle started from 7678 on 5 minutes chart.
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 inner wave (3) completed at 7896, (4) completed at 7780 and (5) is in progress. Wave (5) needs to break above top of wave (3) 7896 and next 61% retracement is placed at 7914. Wave (5) will be extended after breaking above 7914.
Confusing factors in wave counts
- Wave (4) from 7896-7780 is just a huge gap. It seems like a 3 waves move but (a) is very small and (c) is more than 561% of (a).
- It seems an impulse is completed from 7780-7893 but didn’t break above top of wave (3) 7896, thus didn’t meet the minimum requirement of wave (5). So this impulse is the point of confusion which may be cleared tomorrow.
We can just see a small impulsive wave from 7820-7858 followed by corrective from 7858-7832 at last which could be wave (1) and (2) or (a) and (b). This pattern at last just gives us the immediate stoploss for longs at 7832.
For medium term, lower line of ED on first Hourly chart which is around 7720-7740 at present should be the stoploss for positional longs and any decline near this line can be bought with stoploss below the line expecting minimum target 8032.
Very short term outlook is bit confused because of huge gap down followed by a sharp upside impulse which failed to break previous top as explained above. There are 3-4 possibilities there so we need to wait for tomorrow or till we identify a particular pattern.
We can just conclude that the stoploss for any longs must be 7832. Stoploss must be changed to 7857 once Nifty break above 7872. Nifty will be in cautious zone after above 7914. I am not able to conclude anything at present if Nifty breaks below 7832.
Safe traders must wait for tomorrow to get clear pattern for fresh trade whereas experience traders can decide their trade based on above mentioned conditions using strict stoploss.
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