Elliott Wave Outlook of Nifty for April 2016 Expiry Onwards

| April 27, 2016

Nifty opened bit lower today at 7942 but bounced sharply from low to break yesterday high followed by a range bound move for rest of the day. Finally Nifty closed 17 points up at 7979 after registering low of 7940 and high of 7991.

Yesterday I expected a bounce from lower levels and suggested buying on dips if get 7938-7915 range with stoploss of 7914 expecting upside targets 7997-8090. Nifty bounced from 7940 and may achieve 7997 tomorrow only. Let’s have a fresh look at latest chart now

Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Outlook of Nifty for Budget Day 29 Feb 2016 Onward.

Elliott Wave Counts of Nifty on hourly chart

Elliott Wave Counts of Nifty on hourly chart

This is hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825. This is the same chart with explanations which I posted in my last analysis report as there is no change in wave counts on this chart.

After seeing most of the conditions and structure on chart it seems wave (3) completed at 7742 followed by wave (4) completed at 7516 as “Irregular Correction”. There are repeated Irregular Corrections in this whole bounce from 6825.

Now, if wave (4) is completed at 7516 then minimum 38%-61% projection for wave (5) is placed at 7862-8078 where minimum 38% is already achieved and we need to look at its pattern and inner waves for further probabilities.

Now let’s try to identify inner waves of bigger wave (5) started from 7516 as shown on first hourly minutes chart.

Elliott Wave Counts of Nifty on 30 minute chart

Elliott Wave Counts of Nifty on 30 minute chart

This is 30 minute’s chart of Nifty covering bounce from 11 April 2016 low 7516 which I am expecting as start of wave (5). This is again the same chart with explanations which I posted in my yesterday’s analysis report as there is no change in wave counts on this chart.

Most probably, it may be wave (1) completed at 7717, (2) completed at 7674, (3) completed at 7950, wave (4) may be completed at 7822 as “Irregular Correction” and wave (5) is in progress.

Wave (3) is just 138%, thus not extended and 161% for wave (3) is placed at 7997. Either wave (3) needs to be extended (complete above 7997) otherwise next wave (5) needs to be extended which will be more than 280 points approximately.  So, at least 7997 on upside we can expect.

And if wave (4) completed at 7822 then wave (5) needs to project minimum 61% (need to be extended) which is placed at 8090.

Now, let’s have a separate look at progress of wave (5) on separate 1 minute chart.

Elliott Wave Counts of Nifty on 5 minute chart

Elliott Wave Counts of Nifty on 5 minute chart

This is 5 minute time bar chart of Nifty covering move from today’s low 7822 which I am expecting as progress of wave (5) on 30 minutes chart.

It may be waves 1, 2, 3 and 4 are completed and 5 is in progress. Wave (3) is extended, so minimum 38% projection of wave (5) is placed at 7998 where next 61%-100% is placed at 8033-8092.

61% projection of wave (5) on hourly chart, 61% projection of wave (5) on 30 minutes chart and 100% projection of wave (5) on 5 minutes charts is falling in narrow range of 8082-8092.

The entire major and inner wave 5s will be in extended zone after 8082, so 8090 is very important levels to watch if comes and there may be sudden and huge decline from there. We need to be cautious at higher levels now onward and wait for low risk selling opportunity at higher levels if conditions fulfills.

Stoploss for any short term longs must be 7940 which is start of wave (5) I have shown on last 5 minutes charts.

Conclusion:

Again as I explained yesterday, minimum 7997 is expected on upside and 8090 is very next possible level where 7940 must be the fresh/trailing stoploss for any existing/fresh longs which is start of wave (5). So, very short term strategy must be “Buying on Dips” expecting 8033-8090 on upside.

There are cautions for sharp decline after 8090. Nifty can fall without achieving 8090 if I am wrong at counting waves on last 5 minutes chart. So, 7940 must be the strict stoploss if I am wrong.

8090 is becoming very crucial and alarming levels where there is sign of completion of bigger impulse started from 6825 and every inner most, inner and bigger wave 5 is meeting its extended zone. We will watch the wave pattern closely now onwards and may make selling strategy if things favors in coming sessions.

On the other hand, the whole bounce from 6825 progressed with repeated “Irregular Correction” in between. There are about 5-6 Irregular Correction on major and minor levels which is extending this wave upwards and upwards. But this type of move is risky most of the time as Irregular Correction are formed because of over-confidence or strong expectations but it becomes bubble and destroy later after completion of impulse.

I will prepare a special report on Sunday on these repeated “Irregular Corrections” formed within this whole bounce from 6825. And it will be a great learning experience especially to understand the nature and effect of “Irregular Corrections”.

Any trade can be decided based on above mentioned conditions with strict small stoploss.

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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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