Elliott Wave Outlook of Nifty for 10 Jan 2018 Onward

| January 9, 2018

Nifty opened higher at 10645 and bounced further to register new all time high 10659 but declined sharply by more than 50 points to register day’s low 10603 and finally closed 13 points up at 10637.

Yesterday, a decline of 50-80 was expected before breaking higher above 10657 but 10583-10553 was good support range on downside from where the bounce for new high was expected again. Trading strategy was to book profit in existing longs in 10631-10724 range and fresh buying was suggested in 10583-10553 range. Nifty declined 50 points from 10659-10603 without breaking higher above 10657 as expected and closed at 10637. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 28 Sep 2017 low 9687 and earlier wave counts are explained in my previous analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frames as on 14 Aug 2017

Elliott wave analysis of nifty on 5 hourly chart

Elliott wave analysis 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 new upside impulse. There is no major change in wave counts. This is the same chart with explanation which I had explained in my last analysis report because there is no major change in wave counts on this chart.

There are confusions and low confidence in counts but casually it seems, wave (1) completed from 9786-9945, (2) completed from 9945-9881, wave (3) may be in completed from 9881-10490, wave (4) may completed at 10033 and wave (5) may be in progress.

Wave (5) already achieved minimum 61% projection placed at 10529 and next 100% projection is placed at 10836 which may or may not be achieved.

Now, let’s analyze the progress of wave (5) started from 10033 to check its pattern.

Elliott wave analysis of nifty on hourly chart

Elliott wave analysis of nifty on hourly chart

This is hourly time bar chart of Nifty covering bounce from 10033 which I am expecting as progress of wave (5) on 5 hour chart. Again there is no major change in wave counts on this chart and pattern is still moving as per expectations.

It seems inner (i) of (5) completed from 10033-10329, wave (ii) may be completed from 10329-10074 as Irregular Correction, wave (iii) may be completed from 10074-10552, wave (iv) completed from 10552-10404 as Simple Zigzag and wave (v) may be in progress.

Minimum 38%-61% projection for wave (v) is placed at 10602-10724. So, 10602-10724 is the minimum target range for completion of wave (v) whereas minimum 10602 is already achieved.

Though, wave (v) achieved its minimum projection but pattern doesn’t seem completed. So, we need to have a separate look at progress of wave (v) on lowest possible time to check its pattern.

Elliott wave analysis of nifty on 5 minute chart

Elliott wave analysis of nifty on 5 minute chart

This is 15 minutes time bar chart of Nifty covering bounce from 10404 which I am expecting as start of wave (v) on hourly chart.

It seems inner wave [1] of (v) completed from 10404-10503, [2] completed at 10429, wave [3] may be in completed at 10659 and wave [4] or [5] may be in progress.

23%-38% retracement of wave [iii] of [3] is placed at 10604-10571. So, 10604-10571 is the immediate support range on downside and 10571 is the breakeven point below which we can think of any short term reversal.

Minimum 38%-61% projection for wave [5] is placed at 10700-10760 when calculated from 10603. So, 10700-10760 is the minimum target range for wave [5] if wave [4] is already completed at 10603.

Overall, Nifty is expected to give one more bounce above 10659 without breaking lower below 10571. And minimum upside target range in 10700-10760 if Nifty bounce straight way without breaking below 10604 otherwise fresh levels will be calculated from fresh low.

Conclusion

Nifty is expected to give one more bounce above 10659 in short term without breaking lower below 10571 and minimum upside target range is 10700-10760 if Nifty bounces straightway without breaking below 10604. But if Nifty breaks below 10604 without achieving 10700 then new fresh levels will be calculated from fresh low, but bounce above 10659 is expected in every case.

On upside, 10724-10760 is good resistance range and expected to be short/medium term top because all bigger and smaller wave (5) or (v) or [5] are achieving 61% projection in this range. So, a small or big decline can be expected before breaking higher above this range.

Trading Point of View:

  1. Nifty if get in 10590-10571 range without breaking above 10700 then small risk can be taken by buying Nifty in this range using stoploss of 10559 (some points below 10571) expecting new life time high as minimum target. Then trade will not be valid after Nifty touching 10700.
  1. Nifty if bounce towards 10724-10760 then Jan 2018 puts can be bought in very light quantity without stoploss. Stoploss will be calculated after activation of trade.

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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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