Elliott Wave Outlook of Nifty for Dec 2018 Expiry Week

| December 23, 2018

Nifty opened almost flat at 10944, registered high 10963 but declined sharply by more than 200 points to register low 10738 and closed 197 points down at 10754.

Nifty was in positive zone with 10931 as downside breakeven and possibility of bounce towards 10985-11047 was there. But Nifty was expected to decline towards 10880 if breaks and stay below 10931 for 15 minutes.

Buying was suggested in 10935-10931 range if corrective pattern completes in this range using small stoploss of 10919 but Nifty broke below 10931 sharply and decline further by 200 points. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott wave analysis of Nifty for Dec 2018 Expiry

Elliott wave analysis of Nifty for Dec 2018 Expiry

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. There is no change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress.

Minimum 38%-61% projection for wave ‘5’ is placed at 11664-12689 but earlier high is 11760. So, 11760-12689 is minimum target range for completion of wave ‘5’.

But the move and target is big, so we need to proceed step by step and need to concentrate on bounce started from 10004 to calculate internal moves.

Elliott wave analysis of Nifty for Dec 2018 Expiry

Elliott wave analysis of Nifty for Dec 2018 Expiry

This is hourly time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart.

It seems an Impulse is completed from 10004-10941 and same can be marked as wave (a or 1). Wave (b or 2) completed from 10941-10333 and wave (c or 3) in progress. Wave (b or 2) looks like an Impulse which is a point of confusion.

Normal 100%-123% projection for wave (c or 3) is placed at 11270-11491 which is the normal expected range for completion of wave (c or 3).

38% retracement of progress of wave (c or 3) is placed at 10735, so 10735 can be assumed as immediate support and Nifty can reverse from 10735 if has to reverse otherwise we can witness more fall.

There is lack of confidence in wave counts on this chart because of various factors. So, let’s have a separate look at decline from 10985 to calculate internal levels.

Elliott wave analysis of Nifty for Dec 2018 Expiry

Elliott wave analysis of Nifty for Dec 2018 Expiry

This is 5 minutes time bar chart of Nifty covering decline after 10985 which I am analysing separately. I am taking alternate wave counts because there is confusion in earlier move on hourly chart.

It seems wave [a or 1] completed from 10985-10880, wave [b or 2] completed from 10880-10963 and wave [c or 3] may be completed from 10963-10738 or still in progress.

23%-38% retracement of progress of wave [c or 3] is placed at 10791-10823. So, 10791-10823 is immediate resistance and 10823 is upside breakeven point. Nifty is in negative zone as long as trading below 10823 and any upside reversal can be expected after break above 10823 only.

Within wave [c or 3], it seems inner wave (i), (ii), (iii), (iv) is already completed and wave (v) may be in progress. Wave (v) already achieved 61% projection after breaking below 10761 and next 100% projection is placed at 10707. Wave (v) rarely project more than 100%, so 10707 is immediate support.

Conclusion

For Medium/Long Term: – There is no change in medium/long term outlook, the first Impulse from low 10004 bounced above Reflex Point 10710 which is indicating first sign of bigger reversal for new high above 11760. Now, Nifty can decline below 10004 only if the overall correction started from 11760 turns into Irregular/Complex Correction.

Wave (C) is very big, so we need to proceed step by step and must concentrate on the internal pattern of bounce started from 10004 to decide further trades.

For short term: – Nifty is in negative zone with 10791-10823 as immediate resistance and 10823 as breakeven point on upside. We can think of any upside reversal if Nifty trades and stay above 10823 for 15 minutes. 10707 is immediate support from where a small or big bounce can be expected.

We can’t say confidently if Nifty is going to decline from resistance range or is going to break above 10823 for further upside because of alternate wave counts. So, we need to concentrate on smaller inner wave counts to manage alternate conditions.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

According to the conditions on charts: –

10791-10823 is low risk selling range and buying can be done after break above 10823 but I can’t say confidently if we should sell in 10791-10823 range or wait for buying above 10823 because of alternate wave counts. So, exact trade can decide during market hours only based on small internal pattern.

10707 is immediate support, so small buying can be done near 10707 using stoploss of 10693 expecting 50-90 points bounce.

These are low risk trading strategies I can suggest in such conditions, otherwise traders can plan their own trade based on the conditions explained above.

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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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