Today I am preparing all time frames Elliott Wave analysis report of Nifty. I was not updating longs term wave counts of Nifty because there was lack of clarity but thought of updating today as last long term analysis report I prepared 06 months back on 05 Jan 2016.
This analysis report will cover all time frame wave counts of Nifty, medium/long term outlook of Nifty and some important points useful for Elliott Wave Theory learners. So, let’s start with monthly chart.
As we know, Elliott Wave Theory is a never ending wave’s cycle starts from the birth/beginning of any financial script. Nifty born in 1995 and we need to see chart covering move from 1995 for Elliott Wave theory analysis and move from 1995 can be seen only on monthly chart. So, let’s start from the beginning.
This is monthly time bar chart of Nifty covering move from 1995 which is the beginning of Nifty. It seems a bigger wave (1) completed at 6357 in 2008 followed by bigger wave (2) at 2252 which retraced more than 70%.
Further it is may be inner wave (a) or (i) completed from 2252-6338, (b) or (ii) may be completed from 6338-4531 and (c) or (iii) may be in progress. Wave (c) of (iii) already achieved 100% projection after break of 8644 whereas 123% projection is placed at 9614. So there are 02 possibilities we can expect:
- Either it is bigger wave (3) started from 2252, there is no limit for Nifty on upside in this case. Nifty can rise even above 12000-18000 continuously in long term.
- Or bounce from 2252 may be progress of Irregular wave (B) with inner wave (a) from 2252-6338, (b) from 6338-4531 and (c) is in progress from 4531. In this case, Nifty can decline below 6415 and even have possibility decline till 2252 again after completion of wave (B) upwards.
And 6415 is the important point between these possibilities (explained on next chart). We should not care much about these possibilities as Nifty can take months or years to confirm the exact pattern. So we must concentrate on progressing waves only, Waves will definitely show the signs when there is actual time for any bigger move. So, let’s have a separate look from 5518 from where the last impulse has been started.
This is weekly time bar chart of Nifty covering move from 5118 from where last upside impulse wave has been started. It seems wave (1) completed from 5118-6417, (2) completed from 6415-5933 and wave (3) may be completed from 5933-9119.
But (4) retraced more than 70% of wave (3) which is not normal. Though it is possible for wave (4) to retrace so deep as its maximum limit is still 6415 (start of wave 2) but it is a very rare case and we must be cautious in rare cases. On the other hand, pattern for wave (4) is not identifiable.
And if we assume wave (4) already completed at 6825 then minimum 38% projection for wave (5) is placed at 8355 which is way below the top of 3. So, minimum targets for wave (5) becomes 9119 (top of wave 3) which is the reason I am not giving importance to long term as Minimum possible target for Nifty is still 9119.
We can give importance to long term if minimum targets are way above previous high but here minimum target is previous high only and market has possibility of decline again. Though there is no limit for maximum, we give importance to minimum only. So, we need to concentrate on last bounce of 6825 only which is going to indicate further long term triggers. Let’s have a look.
This is daily time bar chart of Nifty covering move from 29 Feb low 6825. Though this bounced progressed with lots of overlapping of waves which made it tough to identify counts but still I am marking most probable counts based on my understanding.
By casual look it seems an impulse completed from 6825-7992 which could be wave (A) of (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. Wave (C) or (3) is progressing very slower, it needs to move upside faster from here to gain the personality of wave (3).
And there is overlapping within the progress of wave (3) or (C) so we need to wait for clarity. We need to concentrate on start of last upside impulse from 7927 to conclude further probabilities and to make further trading plans.
This is 15 minutes chart of Nifty covering move from 24 June low 7927 which I am expecting as progress of new impulse upside.
It may be wave (1) completed from 7927-8120, wave (2) completed from 8120-8056, wave (3) completed from 8056-8398, wave (4) may be completed from 8398-8287 and wave (5) is in progress or already completed at 8594.
Fibonacci Ratios wise, wave (5) already achieved normal 61% projection and is in extended zone. Even inner waves of (5) also achieved all Fibonacci projection but there is small confusion in the pattern of very last wave (v) of (5) at top. There is a possibility of an “Irregular Correction” at top and wave (v) of (5) may be still pending.
So, we need to look at the move after 13 July 2016 low 8493 for very immediate outlook and to prepare short term trading strategy.
This is 5 minutes time bar chart of Nifty covering bounce from 13 July 2016 low 8493 which I was expecting as start of wave (v) of (5) in my previous report but the pattern from 8493-8594 is not convincing.
The bounce from 8493 which I was expecting as progress of wave (v) of (5) in my last reports achieved its minimum 38% projection after breaking above 8587 but pattern is not convincing. The pattern looks like a 3 wave’s (abc) move, so there is also a possibility of “Irregular Correction” with inner wave (A) completed from 8550-8493, Irregular wave (B) completed from 8493-8594 as (abc) and (C) may be complete from 8594-8510.
After low of 8510, there is 61% bounce again till 8562 looks like a 3 waves move. So,
- If the downward impulse from 8594-8510 is wave (C) of Irregular Correction then Nifty needs to break above 8594 again.
- If downwards impulse from 8594-8510 is wave (A) of (1) then 100%-123% projection for this impulse is placed at 8474-8453 when calculated from 8562.
And 8562-8525 is the range based on which we can plan next short term trading strategy.
Long/Medium has both the possibilities of a great bull rally or a crash. So we should not think much about longs term as it may take even year to confirm exact pattern and practically we can’t trade it. We must concentrate on short term waves only until longs term pattern gives clarity.
And those who refer Nifty for long term investment are not on right path. Every stock has its own wave cycle and we must analyze chart of every stock separately for investment decisions. Nifty is index of just 50 stocks whereas there is approx 7000 stock listed. So, it is not necessary that every stock move with Nifty.
If you analyze stocks individually then you will find many stocks which can double or triple in small market rallies even in bearish market. Example is “Capital First” which I analyzed 4 months back on 28 Feb 2016. This stock bounced about 100% in last 4 months. Read analysis report Capital First Limited (CAPF) can achieve 464-551 without breaking below 320, CMP 359
For Short Term
Nifty already achieved our minimum target 8587 on Friday and then triggered trailing stoploss of 38% retracement of the move started form 8500. So, all the long positions are closed and it is the time to wait for next trading opportunity.
For tomorrow Intraday, 8562-8525 is the range based on which we can initiate next trade. Break above 8562 can be bought with 8541 as stoploss for targets of 8594 which can extend to 8645. Break below 8525 can be sold with 8546 as stoploss expecting 8474-8453 as downward targets. Exit shorts if Nifty failed to break below 8474 within 3 hours after tomorrow opening.
Trade with strict stoploss as there is no confirmation of exact pattern.
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