Elliott Wave Outlook of Nifty for the Week Starting 14 Dec 2015

| December 13, 2015

Nifty opened gap up at 7699 but declined sharply after hitting high of 7703 and traded with weakness for rest of the day to decline more than 120 points from day high. Finally Nifty closed 72 points down at 7610 after registering day’s low of 7575.

In Friday’s analysis report Elliott Wave Analysis Report of Nifty for 11 Dec 2015, I mentioned that the personality of bounce from 7606 is not suggesting any big reversal. And advised to book profit in longs at higher levels and if Nifty even touches 7651 again can be sold expecting targets below 7606. Nifty declined sharply below 7606 after touching 7651. Let’s have a latest look on charts.

Today’s  I am showing wave counts from Oct 2015 high 8336 as previous counts are same as I explained in my previous report Elliott Wave Outlook of Nifty for Dec 2015 Series.

Elliott Wave Counts of Nifty for 14 Dec 2015

Elliott Wave Counts of Nifty for 14 Dec 2015

This is hourly time bar chart of Nifty covering decline after Oct 2015 high 8336. Again as I explained in last 3-4 repots, after breaking the low of 7714, it seems previous decline from 8336-7714 may be waves 1,2 and 3 and it is wave (5) in progress from 7979.

Previous decline from 8336-7714 was steep with just one noticeable correction in between. If that one correction from 7997-8114 we assume as wave (2) then wave (3) projected less than 161%, then wave (3) is not extended.

Now, if wave (3) is not extended then wave (5) we can expect as extended, thus we can expect wave (5) to project more than 61%. Wave (5) achieved minimum 61% projection after breaking 7594 on Friday and 70%-100% projection is placed at 7543-7357.

Other Possibility: The declined from 8336-7714 is steep without any reasonable correction in between. So maybe it is an impulse completed from 8336-7714 as wave (A) and it is wave (C) in progress from 7979. In this case also, Wave (C) needed to project minimum 61% of (A) where as 70%-100% projection is placed at 7543-7357.

Now, we need to analyze progress of wave (5) or (C) from 7979 separately to see where it is going to complete.

Elliott Wave analysis of Nifty for 14 Dec 2015

Elliott Wave analysis of Nifty for 14 Dec 2015

This is 15 minutes time bar chart of Nifty covering decline after 02 Dec high 7979 which I am expecting as start of wave (5) or (C).

In Friday’s report I mentioned that, maybe it is wave (3) completed at 7606 as we didn’t see any reasonable correction for wave (4) and Nifty proved it on Friday.

Now, it seems wave (3) completed at 7606 followed by 23%-38% correction till 7703 as wave (4) and last wave (5) is in progress from 7703. Now wave (5) needs to project minimum 38% which is placed at 7560 whereas 61%-100% projection is placed at 7472-7330, wave (5) will be in extended zone after 7472. And wave (5) is still short of 38% projection (7560).

So, we need to analyze progress of wave (5) of above 15 minutes chart which started from 7703 on separate 5 minutes chart to see where it is going to complete.

Elliott Wave analysis of Nifty for 14 Dec 2015

Elliott Wave analysis of Nifty for 14 Dec 2015

This is 5 minutes time bar chart of Nifty covering move after Friday’s high 7703 which I am expecting start of wave (5) of above 15 minutes chart.

By casual look, it seems that impulse is completed from 7703-7575 but this wave (5) has not achieved its minimum projection of 38% yet which is at 7560 (explained on above 15 minutes chart). So, maybe it is just inner wave (iii) completed at 7587 followed by wave (iv) completed at 7621 as “Irregular Correction” as shown on chart. So, wave (v) needs to project minimum 38% which is placed at 7572 whereas 61%-100% projection is placed at 7541-7493. Minimum 7560 we can expect for this wave (v).

But, if this impulse started from 7703 is already completed at 7575 and wave (5) is still short of minimum 38% then this last impulse from 7703-7575 may be inner wave (i) of (5) and wave (5) can go highly extended. So, we need to observe tomorrow’s Nifty action.

Conclusion:

Nifty broke below 7606 and also achieved 7594 as expected. Now, minimum downward levels we can expect for Nifty is 7560 which is minimum 38% projection for wave (5) on 15 minutes chart. We need to see price action below 7560 for any further action.

Overall, Nifty is in last wave (5) and inner wave (v) of (5) in all time frames as explained above and we can see a good bounce of minimum 280-450 points or even a bounce above 8336 after completion of this impulse downwards. But, just a last conformation is pending in last wave (5) started from 7703 if it is going to be extended or being normal which may be confirmed tomorrow.

So, Nifty may reverse from 7560-7540 range or may reverse from 7472-7330 range based on extension of last wave (5) started from 7703 on last 5 minutes chart. Thus, we need to wait for one more day to take decision for any positional longs after seeing wave’s action tomorrow.

If Nifty bounced before achieving 7560 then any upside reversal can be seen only above 7704 as Nifty needs to touch 7560 at least in normal conditions.

For tomorrow (Monday), we can expected minimum 7560 on downside and further we needs to see wave’s action below 7560. There are following conditions after that:

  1. If Nifty breaks below 7560 then stoploss for existing shorts must be modified to 7600.
  2. If Nifty first break below 7560 followed by bounce and touched 7600 then Nifty can be bought positional with low as stoploss.

Any trade can be decided only during live market hours based on above mentioned conditions. Trade light with strict 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"