Elliott Wave Outlook of Nifty for Dec 2015 Expiry Week

| December 28, 2015

Nifty opened gap up at 7888 but declined sharply just after opening and consolidated with negative bias for rest of the day. Finally Nifty closed just 4 points down at 7861 after giving low of 7835.

In my last report, I expected weakness at higher levels and suggested “If Nifty trades below opening price continuously between 9:30-9:45 AM then Nifty can be sold with high as stoploss expecting downside targets of 7776-7733”. Nifty opened at 7888 and was trading in 7857-7870 range between 9:30-9:45 AM and didn’t break high again. Though Nifty didn’t achieved minimum targets (which may be achieved in next sessions) but trade was in perfect direction giving marginal profit. Now, let’s analyze latest charts for further scenario.

Today’s  I am showing wave counts from 11 Dec low 7551 as previous counts are same as I explained in my previous report Elliott Wave Targets of Nifty for 17 Dec 2015 after Fed Meet.

Nifty outlook for Dec 2015 Expiry

Nifty outlook for Dec 2015 Expiry

This is 5 minutes time bar chart of Nifty covering move after Monday’s low 7551. There is no change in waves counts on this chart and Nifty is still in same pattern which I expected in my last report. It seems,

  1. Wave (1) completed from 7551-7663.
  2. Wave (2) completed from 7663-7595 as simple (ABC) which retraced exactly 61% of (1).
  3. Wave (3) may be completed from 7595-7852 which is highly extended.
  4. But there is small confusion in further move if wave (4) already completed at 7733 and (5) is in progress OR Wave (4) is still running as “Irregular Correction” with bounce from 7733 as wave (B) of this irregular Correction. This condition is very difficult identify in advance and same I explained in next chart.

Fibonacci Calculation wise, 38%, 61% and 100% projections are placed at 7847, 7919 and 8034 respectively if bounce from 7733 is wave (5).

So, let’s analyze bounce after 7733 for more clarity.

Nifty outlook for Dec 2015 Expiry

Nifty outlook for Dec 2015 Expiry

This is again 5 minutes time bar chart Nifty covering bounce after today’s low 7733 which I am expecting as start of wave (5) or wave (B) of Irregular Correction.

Here also Nifty reacted as per expectation till now. The bounce from 7733-7840 looks like wave (a), Decline from 7840-7776 may be wave (b) as Irregular Correction and next bounce from 7776-7888 may be wave (c). I have shown it as (abc) rather than 123 because last impulse from 7776-7888 looks slower than previous impulse and still it is trading below 100% projection and wave (4) also overlapped (2).

And this whole (abc) wave from 7733-7888 may be irregular wave (B) of (4) where (C) of (4) is pending which needs to decline till 7776-7733 at least. Or it can be inner wave (i) of (5) progressing as Ending Diagonal Triangle.

If we look at decline after hitting high of 7888 then it also looks like a downward impulse followed by upwards Irregular Correction which may be wave 1 and 2 or A and B which indicate some decline.

Other Possibility: If the bounce from 7733-7888 is actually wave (1) and (2) followed by inner waves (i) and (ii) of (3) then Nifty needs to bounce sharply from here with fast 100-125 points upside. But conditions are not favorable for it yet.

Conclusion:

Nifty declined from 7852-7888 range but didn’t achieved our minimum target of 7776-7733 but possibilities are still there for decline till same 7776-7733 range as there is scope of Irregular Correction at top. So, Nifty has possibility to decline till 7776-7733 without breaking above 7889. Even if Nifty breaks 7889 then also breaking above 7919 seems tough. Later scenario can be concluded only once Nifty reach 7776 at least.

So for tomorrow,

  1. Either Nifty can be sold with stoploss of 7889 expecting downward targets of 7776-7733. Buying should be avoided even if Nifty breaks above 7889 and 7921 must be final stoploss for shorts.
  1. If Nifty opens above 7888 but then trades below opening price between 9:30-9:45 AM then also one can sell with high as stoploss expecting same 7776-7733 as targets.
  1. Conditions are not favorable for Buying from these levels.

Otherwise, any trade can be done only during live market hours after seeing latest waves pattern tomorrow. Trade light and with strict stoploss and try to trade if get price near to stoploss. Be strict to intraday trade as Nifty is near expiry and Nifty often forms complex wave’s pattern near expiry.

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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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