Elliott Wave Analysis Updates of Nifty for 24 Sep 2015

| September 23, 2015

Nifty opened gap down today at 7737 and started recovering gradually after giving low of 7723 to bounce almost 160 points from low. Finally Nifty closed 33 points up at 7845 after giving day’s high of 7882.

Nifty opened Gap down below 7787, achieved 7753-7706 range and also bounced 70-140 points from low as expected in yesterday’s report but Nifty bounced more than its normal limits. So, let’s have a fresh look on latest charts.

Today, I am covering Nifty wave counts after July 2015 high 8665 as previous counts are same as I explained in my previous Elliott Wave Analysis Report of Nifty. Please read: Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015.

Elliott Wave Analysis of Nifty for 24 Sep 2015

Elliott Wave Analysis of Nifty for 24 Sep 2015

This is hourly time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of downward impulse. There is no change in these counts as  it seems,

  • Wave (1) completed from 8655 -8321
  • Wave (2) completed from 8321 – 8621
  • Wave (3) completed from 8621 – 7541
  • Wave (4) completed at 8055 as ‘abc’ which retraced more than 38%.
  • Wave (5) needs to go below 7541 at least to avoid 5th failure whereas 61% projection is placed at 7366 which may or may not be achieved.

Now let’s have a look at decline from 8055 to analyze progress of wave (5) started from 8055.

Elliott Wave Analysis of Nifty for 24 Sep 2015

Elliott Wave Analysis of Nifty for 24 Sep 2015

This is 5 minutes time bar chart of Nifty covering decline after 18 Sep 2015 high 8055. It seems inner wave (1 or a) is completed from 8055 -7910, (2 or b) completed from 7910 -8021 as simple zigzag and (3 or c) is completed from 8021 -7723.

Let me explain why I have shown both the possibilities of (abc) and (123):

  1. Minimum limit for bigger wave (5) is 7541 but it already completed its inner wave (3) at 7723 and Nifty is still 340 points far from 7541. So, wave 5 needs to be highly extended, more than 100% to achieve 7541 which is possible but not normal.
  1. If I take wave (3) complete at 7723 then wave (4) retraced more than 50% which is again not normal. Normally we see 23 -38% retracement for wave (4). So we need to be cautious. And on the other hand, it is very difficult to identify the pattern of bounce from 7723 -7882.

So, there are possibilities for bigger wave (5) (started from 8055 on first chart) to progress as Ending Diagonal (ED) and 8055 -7723 may be inner wave (1) as ‘abc’. Bigger wave (1) (from 8655 -8321 on first chart) was clean impulse so there also are possibilities for wave (5) to be Ending Diagonal.  Or there may be something else which I am not able to identify yet.

Also Read,

Conclusion:

Possibilities for Nifty to break below 7541 again are still there in coming days/weeks to complete wave (5) but inner pattern needs clarity as of now as Nifty retraced more than 38% from low today.

Part profit booking for shorts should be done at lower levels keeping stoploss of 7883 for rest to re-enter later after clarity of pattern, as Nifty can bounce to 7928-8021 also if wave (5) going to be an Ending Diagonal.

Positional Strategy should be “Selling on Rise” until we see 7541 or any change in current wave’s pattern. Any change in wave’s pattern, trailing stoploss for sell and inner levels will be updated in daily Elliott Wave Analysis reports of Nifty.

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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"