Elliott Wave Outlook of Nifty for 13 Dec 2016 Onward – Possibility of Irregular Correction

| December 13, 2016

Nifty opened gap down at 8230 and traded with negative bias for rest of the day. Nifty declined more than 100 points to register day’s low 8154 before closing 90 points down at 8170.

In my last report, I suggested to book part profit in existing longs in 8263-8293 range and hold rest with trailing stoploss of 8186. And if Nifty first achieves 8263 followed by decline below 8189 then sell Nifty at 8189 with stoploss of 8219 expecting downward targets 8077-8056. Nifty reversed from our part profit booking range of 8263-8293 and then decline below 8189 activate selling trade. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 21 Nov 2016 low 7916 to conclude short term scenario and previous wave counts are explained in my previous analysis report Elliott Wave Analysis Report of Nifty for 05 Dec 2016

Possibility of Irregular Correction

Possibility of Irregular Correction

This is 15 minutes time bar chart of Nifty covering bounce from 21 Nov 2016 low 7916.

An impulse seems completed from 7916-8250 with inner wave (1) may be completed from 7916-8055 (pattern is not clear), wave (2) may be completed from 8055-7952, wave (3) may be completed from 8055-8122, wave (4) may be completed from 8122-8066 and wave (5) may be completed from 8066-8250 as ED which projected more than 61%. Learners, please looks at the inner wave counts of ED carefully. This impulse can be wave (A or 1).

38%-61%-78% retracement of this whole impulse (from 7916-8250) is placed at 8122-8043-7987 where 38% is already achieved.

Further, it seems an Irregular Correction pattern is in progress after 8250 with inner wave (A) completed from 8250-8056 as impulse, wave (B) may be completed from 8056-8274 as Irregular wave (wave (B) broken the start of (A)) and wave (C) may be in progress.

Wave (C) is always an impulse and we generally see wave (C) to project till end of (A) which is 8056. So, this pattern is indicating a decline towards 8056 and pattern of decline must be impulse.

And further, if I am right at identifying the pattern and it is really Irregular Correction in progress then we can see a very sharp bounce of 350-500 points after completion of this Irregular Correction around 8056.

Read the details article explaining pattern, personality, calculations and effects of Irregular Correction at Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar

Now, let’s analyze progress of wave (C) (started from 8274) of expected Irregular Correction separately on 5 minutes chart.

Elliott wave counts of Nifty for 13 Dec 2016

Elliott wave counts of Nifty for 13 Dec 2016

This is 5 minutes time bar chart of Nifty covering decline from 9 Dec high 8274.

It seems impulse is in progress from 8274 with inner waves (1), (2) and (3) are completed till 8254 and wave (4) may be in progress. 23%-38% retracement of wave (3) is placed at 8182-8199.

So, 38% retracement 8199 must be the fresh stoploss for any shorts and same is the point above which we can think of short term reversal for new high above 8274.

Conclusion:

For medium term, there is possibility of Irregular Correction pattern and Nifty have possibility to bounce sharply by 350-500 points after completion of Irregular Correction near 8056 if I am right at identifying the pattern.

Read the details article explaining pattern, personality, calculations and effects of Irregular Correction at Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar

For Intraday/Very short term, 8199 is the points above which we can think of any short term reversal towards 8274 and same 8199 (some points above 8199) must be the stoploss for any existing and fresh shorts.

And we need to keep both medium term and short term scenario to plan our next trading strategy.

For Trading Point of View:

For medium term, If nifty decline sharply towards 8056 then both Nifty Jan 2017 7500 Put and 8500 Call can be bought in equal quantity for 5-10 Days and there is a possibility for good bounce of 350-500 points or a good decline below 7916. Any stoploss can be calculated later after seeing the conformation of pattern.

Traders who like to trade in Nifty Futures can wait for the conformation of completion of pattern to initiate trade.

For Short Term/Intraday, Stoploss for existing shorts if taken at 8189 must be 8203 (some points above 8199) and any fresh shorts can be taken in 8182-8199 range with same stoploss of 8203. Expected targets for downside are 8077-8056. Trade with strict stoploss.

Nifty breaking above 8199 can rise further towards 8230-8274.

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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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