Nifty opened mild gap down at 8404 and bounced to register day’s high 8423 but failed to sustain at higher levels and declined sharply by more than 80 points to register day’s low 8340 before closing 85 points down at 8349. Nifty broke 8344-8461 range after 5 sessions.
Friday, 8344 was the point below which we can think of any reversal and 8461-8490 was expected on upper side and trading strategy was to buy on dips using stoploss 8343. Nifty broke 8343 on Friday after a long consolidation and now we needs to have a fresh look at latest chart as there is abnormality in previous pattern.
Today I am covering bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 11 Jan 2017 Onward.
This is 30 minutes time bar chart of Nifty covering bounce from 26 Dec 2016 low 7893. The whole bounce from low started slowly and gained speed as progressed higher.
By looking at the structure at bottom and personality of the bounce, it seems wave (3) is completed at 8461 and wave (4) may be in progress as explained on the chart.
There were repeated upside impulses followed by downward correctives (overlapping of waves) at bottom which could be Wave (1) and (2), followed inner wave (i) and (ii) of (3), followed by inner wave 1 and 2 of (iii) as marked at the bottom on chart. And further Nifty may have completed all waves 3, (iii) and (3) till 8461 with speed and gaps (personality of wave 3).
If wave (3) completed at 8461 then normal 23%-38% retracement of wave (4) is placed at 8326-8244. So, 8326-8244 is the indicative range from where we can expect a bounce of minimum 182-295 points [minimum 38%-61% projection for wave (5)] if I am right at identifying the pattern.
So, let’s have a separate look at progress of wave (4) from 8461 on 5 minutes chart.
This is 15 minutes time bar chart of Nifty covering decline from 8461 which I am expecting as progress of wave (4) marked on 1st 30 minutes chart.
It seems wave (a or 1) completed from 8461-8373 as Impulse, Wave (b or 2) may be completed from 8373-8460 as complex correction (most probably Double Zigzag) and wave (c or 3) may be in progress from 8460.
And within wave (c or 3), Inner wave (1) may be completed from 8460-8397, wave (2) may be completed from 8397-8444 and wave (3) may be completed from 8444-8340 or still in progress.
Normal 23%-38% retracement of wave (3) of (c or 3) is placed at 8364-8380. So 8364-8380 is the indicative range from where we can expect a decline of minimum 46-75 points [minimum 38%-61% projection for inner wave (5) of (c or 3), if I am right at identifying the pattern].
And 8380 is the points above which we can expect upside reversal.
For Medium Term, 8326-8244 is the indicative range from where we can expect a bounce of minimum 182-295 points in coming days. 8326-8244 is only indicative range and exact range or any change can be calculated only after seeing the completion of pattern of wave (4).
For Short Term, Nifty can give one more decline of minimum 46-75 points and 8364-8380 is the indicative range from where we can expect this decline. And 8380 is the point above which we can think of upside reversal towards high above 8461.
For Trading Point of View:
For Medium Term, Positional traders who trade with hedging can make trading plan by keeping 8244-8461 range in mind with overall positive bias for coming days.
For short Term/Intraday,
- Nifty can be sold if get in 8364-8380 range using stoploss of 8383 expecting decline of minimum 46-75 points.
- Nifty if even touch 8383 straightway from present levels can be bought at 8383 using stoploss of 8353 (61% retracement of bounce from 8340-8383) expecting upside targets 8440-8461.
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