Elliott Wave Outlook of Nifty for 13 April 2017 Onward

| April 13, 2017

Nifty opened flat today at 9246 but declined sharply just after opening. Nifty decline by more than 80 points to register day’s low 9161 followed by bounce again towards 9226 and finally closed 33 points down at 9203.

Yesterday, 9207 was stoploss for existing longs for upside targets 9273-9330. Shorts were not suggested even if Nifty breaks below 9207. Stoploss of 9207 was triggered today and nifty decline further till 9161 but bounced again and closed at 9203. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from  low 9019 and earlier wave counts are explained in my previous analysis report Elliott Wave Analysis and Outlook of Nifty for 10 April 2017 Onward

 

Elliott wave counts of Nifty for 13 April 2017

Elliott wave counts of Nifty for 13 April 2017

This is 30 minute time bar chart of Nifty covering bounce from 9019 which I am expecting as progress of wave (v) on previous 30 minute chart.

It seems, wave (1) may be completed from 9019-9131 (inner wave (v) is highly extended), wave (2) may be completed from 9131-9024 as Irregular Correction, wave (3) may be completed from 9024-9273 and  wave (4) may be completed at 9161 or still in progress.

Wave (3) retraced more than 38% (more than normal) but the pattern of decline have repeated overlapping and still seems corrective. So, still there are possibilities for wave (4). Maximum limit for wave (4) is 9131 [end of wave (1)]

So, if it is wave (4) in progress from 9273 then wave (5) needs to bounce above 9273 again. 38%-61% projection for wave (5) [calculated from 9161) is placed at 9258-9317.

So, let’s have a separate look at progress expected wave (4) on 15 minutes chart.

Elliott wave counts of Nifty for 13 April 2017

Elliott wave counts of Nifty for 13 April 2017

This is 15 minutes time bar chart of Nifty covering decline from all time high 9273.

The pattern of decline is not clear but there is repeated overlapping within the decline. So, this decline with overlapping of wave can either be a Complex Correction (Double Zigzag or Triple Zigzag) OR it can be repeated downward impulses followed by upward correctives.

So, there is a possibility of either a good bounce (if the decline from 9273 is Complex Correction) Or a very sharply and steep decline (If the waves within decline from 9273 are repeated downward impulses followed by upward correctives).

So, conditions are good for a hedge trade because there is a possibility of good move either side.

Conclusion:

Nifty is consolidating near all time high since last week with gradually decline but with a very complex pattern. There is repeated overlapping of wave within the decline which made it difficult to identify exact pattern and our trades are going wrong. But the overall structure is indicating either a good bounce or a very sharp decline soon.

Generally, most of the conditions are favoring bounce above 9273 again because possibility of wave (4) on 30 minutes chart is not negated yet. Maximum limit for wave (4) is 9131 and any clarity will come only if breaks below 9131.

So, our trades must be either hedged or less risky in such conditions.

Trading Point of View:

As most of conditions are still in favour of a bounce above 9273 as long as Nifty is above 9131 and there is also a danger of very sharp decline. So, for safe trades,

  1. Nifty if open or trade below 9200 (in 9200-9131 range) then 9200 April Call can be bought using stoploss of 9130 expecting target above 9273. Avoid this trade above 9200 because risk/reward with be lower in this case. Trade in options only because of risk of sharp decline.
  1. Positional hedged trade can be suggested on Monday only if conditions favors because there is 3 continuous holidays (14, 15 and 16 April) and premium of Options may decay.
  1. Any shorts can be planned only if Nifty breaks below 9131 but after seeing the pattern.

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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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