Elliott Wave Outlook of Nifty for Dec 2015 Series

| December 6, 2015

Today I am analyzing medium term charts covering decline after all time high 9117 to see if we can identify something for medium to short term. Let’s start with daily chart covering move after 9117.

Nifty Elliott Wave Counts for Dec 2015 Series

Nifty Elliott Wave Counts for Dec 2015 Series

This is daily time bar chart of Nifty covering move after Mar 2015 high 9117. The whole decline from high still looks like the progress of Complex correction (may be progress of Triple Zigzag), which I expected 5 months back but still there is no sign of completion.

May be the 2nd zigzag of Triple Zigzag complete at 7540 and bounce from 7540 is a progress of very complex type of wave (X2). The only thing we can conclude from this chart is that Nifty needs to touch upper line at least to complete wave (X2) which is around 8336-8380 and we can see fall for new low again. But it is difficult to predict how much time and with which pattern it is going to complete.

It just indicated that Investors must keep patience and money for great investing opportunity whenever we see any signs of completion of this Complex Correction. The next upside rally may be biggest rally of all time after seeing a long complex corrective wave.

Now, let’s have a look at decline after Oct 2015 high 8336.

Nifty Elliott Wave Counts for Dec 2015 Series

Nifty Elliott Wave Counts for Dec 2015 Series

This is 30 minutes time bar chart of Nifty covering decline after Oct 2015 high 8336. The decline from 8336-7714 was steep without any 23% bounce in between and there is just one upside correction within it. So, again I can’t say confidently if this whole decline from 8336-7714 is a complete impulse or “abc” wave or wave “123”.

Next bounce from 7714-7979 is also not fully convincing. If I assume it as Wave (abc) then wave (c) doesn’t have personality of impulse, Or if I assume it as Impulse followed by progress of “Irregular Correction” then wave (b) of Irregular Correction seems bigger than normal. So, I am just showing possibilities based on Fibonacci Calculations and there are 02 conditions based on it.

  1. If bounce from 7714-7979 is completion of (abc) correction then we can see lower levels of 7594-7357 in near term.
  2. If this bounce is Impulse followed by Irregular Correction then we can see approx 61% retracement of whole decline from 8336-7714 which is placed at 8098.

These conditions are not so confident for any one sided positional trade yet but conditions are favorable for any hedge trade as we can expect minimum 200-300 points move either side in next 8-10 sessions.

Now, let’s have a look at last decline from 02 Dec high 7979:

Nifty Elliott Wave Counts for Dec 2015 Series

Nifty Elliott Wave Counts for Dec 2015 Series

This is 5 minutes time bar chart of Nifty covering decline after 02 Dec high 7979. The gap down opening on Friday is indicating some sort of wave (3). It may be inner wave (iii) of (3) or (C).

Now we can expect a bounce of 23%-38% (retracement of decline from 7979-7776) from lows which is placed at 7823-7852 but we need to see formation of pattern again in this 7823-7852 range. It is difficult to identify pattern in advance as Nifty closed at extreme low and there is no sign or base for upside yet. We need to have some wave’s formation at lows to identify next move but Nifty closed at extreme low.

So, we can just expect a minimum bounce till 7823-7852 calculation wise but waves pattern we can identify only when waves forms tomorrow.

If we see a correction pattern in 7823-7852 range tomorrow then we can see a further  decline of 76-100 points again from high, identification of impulsive pattern may show new high above 7979 in coming sessions.

Conclusion:

For Medium Term: Nifty needs to bounce till 8336-8380 at least but can’t say how many days it will take and with which pattern it will bounce and also we can’t say about bottom yet. Even nifty can fall sharply for new low after achieving 8336-8380 in case of Triple Zigzag, so investor needs to keep patience for long term investing. For medium term they can buy bullish stocks till 8336 in Nifty. It is not for Future and Options.

For Short Term: Nifty can give a good swing of 200-300 points either side and level is 8098 on upside and 7594 on downside. Conditions are favorable for hedge trade for December series as this 200-300 point’s swing we can see in coming 8-10 sessions.

For Very Short Term/Intraday:  Nifty can show a minimum bounce till 7823-7852 range based on Fibonacci ratios but we need to check pattern formation after achieving this range. Completion of corrective pattern in this range can give decline of 76-100 points from high as wave (5) downwards otherwise nifty can break above 7979 again.

Nifty is going in very Complex Correction pattern from last 8 months which is most difficult pattern of EWT to identify. And inner waves of Complex Corrections are often confusing with rare extensions and patterns, which is the reason I didn’t suggest any positional trade from last 2-3 weeks.

Now Nifty is in the conditions where any intraday trade can be identified only during live market hours, it is always risky to suggest any trade a day in advance as waves are not completely clear and Nifty is mostly closing at points where it is difficult to identify very next move a day in advance. Only who learned Elliott Wave Theory can identify trading opportunities during live market hours till we see at least a single complete impulse on either side.

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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"