Nifty opened almost flat at 8213 and bounced marginally till 8238 but failed to sustain at higher levels and declined more than 80 points from high to register day’s low 8153. Nifty bounced again from low by 50 points before closing 16 points down at 8203.
In Yesterday’s report, I expected a decline till 8160-8110 from present levels and trading strategy was selling on rise with immediate stoploss 8258 expecting downward targets 8160-8110. Nifty gave good low risk opportunity to sell with just 20 points stoploss when bounced above 8235 and then achieved first target 8160. Let’s analyze latest charts for further scenario.
Today I am showing move only after 24 May 2016 low 7715 as previous waves are not completely clear and possibilities I have explained in my previous analysis report Elliott Wave Analysis Report of Nifty for 26 May 2016.
This is 30 minutes time bar chart of Nifty covering move from 24 May low 7715 which looks like sharp impulsive wave. This is the same chart which I explained in my yesterday’s report as there is no change in wave counts on this chart.
May be inner wave (3) complete at 8294 as there is not even a 23% correction in between the whole move started from 7715-8294 as shown on chart. If wave (3) completed at 8294 then normal 23%-38% retracement for wave (4) is placed at 8157-8074 which is already achieved.
Now wave (4) also seems completed at 8063 which retraced slightly more than 38% as Simple zigzag and (5) may be in progress. Minimum 38%-61% projection for wave (5) is placed at 8284-8420 which Nifty needs to achieve in coming sessions.
So, Nifty can achieve minimum 8294 (top of wave 3) in coming session which can further extend to 8420. This possibility will be negated only if wave (4) turned into complex correction otherwise wave (4) has already completed an ‘abc’ cycle and achieved 38% retracement. This pattern is valid till Nifty is trading above 8063.
So, we need to analyze bounce from 8063 to conclude further Nifty movement and to prepare any trading strategy.
This is 15 minute’s time bar chart of Nifty covering move for 13 Jun 2016 low 8063 which I am expecting as start of bigger wave 5 as Ending Diagonal Triangle (ED) pattern. Same as I explained in my last report, there are possibilities that wave 5 is progressing as Ending Diagonal Triangle with,
Wave (1) of ED completed from 8063-8213 as (abc), (2) completed from 8213-8074 as Simple Zigzag, wave (3) seems completed from 8074-8257 which projected exactly 123% and wave (4) may be already completed at 8153 or still in progress.
If wave (4) already completed at 8153 the wave (5) needs to complete above 8294 (top of bigger wave 3) but not above the upper line joining wave (1) and (3) which is around 8290 at present. But there are some observations in case wave (4) completed at 8153.
- Wave (2) was simple zigzag but wave (4) is also simple zigzag which is not common.
- If wave (4) completed at 8153 then the Pattern of ED is becoming Converging Triangle which is again possible but not common.
- Wave (5) of ED needs to complete above 8294 but upper line joining wave (1) and (3) is still below 8294. So wave (5) cannot complete unless that upper line joining wave (1) and (3) rise above 8294.
So may be wave (4) is not completed and complete around 8110-8100 but no matter if wave (4) is completed at 8153 or not, this ED started from 8294 needs to complete above 8294 without breaking below 8074 (start of wave 3). And after completion of ED above 8294 but below the upper line joining wave (1) and (3), we can expect a minimum decline of 250-400 points.
The whole pattern and possibility of ED will be negated if Nifty breaks above upper red line joining 8213-8257 or if Nifty break below 8074 without achieving 8294.
Please read the detailed explanation of Ending Diagonal Triangle pattern at Ending Diagonal Triangle (ED) Pattern of Elliott Wave Theory Explained by Deepak Kumar.
There is no change in the conclusion as there are possibilities for Ending Diagonal Triangle Pattern in progress from 8063. Wave (4) of ED achieved its minimum requirement by breaking below the line joining 8074-8107 as I expected in my last reports but still have possibilities to go further down.
There are 02 possibilities for further move based on which we need to prepare short term trading strategy and these conditions are:-
- Nifty needs to achieve 8294 at least without breaking below 8074 because wave (5) of ED needs to complete above 8294 and wave (4) cannot go below 8074.
- Nifty is expected to decline by 250-400 points at least after completion of ED above 8294.
So, the short term strategy would be: –
- Buy on every decline till 8110-8100 with strict stoploss 8074 unless Nifty achieves 8294. Avoid selling until Nifty achieves 8294.
- Sell Nifty or Buy Nifty 8100-7900 July Put after Nifty achieving 8294 expecting minimum targets 8100-7900. Exact entry range and stoploss can be calculated later after seeing the pattern after achieving 8294 which I will explain in my further reports. Avoid buying above 8294.
All these possibilities and outlook will be negated if Nifty breaks above upper red line joining 8213-8257 or if Nifty break below 8074 without achieving 8294.
Effect and Outcome of BREXIT on Nifty
Subscribers and followers are asking about effect or outcome of BREXIT on Nifty. I apologize to say that I don’t have any idea about BREXIT and I don’t know what will the effects on Nifty because I don’t follow any news, events, data etc. Possibilities as per Elliott Wave Theory analysis I have explained above and any trading decision can be made according to these conditions.
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