Nifty opened flat at 7486 and bounced till 7527 but failed to sustain at higher levels and declined again to register day’s low 7442. Nifty again bounced 50 points from 7442 before closing flat at 7485.
Yesterday I suggested stoploss for any longs at 7485 which triggered at opening only and conditions for shorts didn’t match as Nifty was trading above opening price between 9:30-9:45 AM. Finally, it must be a “no trade” day based on strategies given yesterday. Let’s have fresh look at latest charts.
Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Outlook of Nifty for Budget Day 29 Feb 2016 Onward.
This is 15 minute time bar chart of Nifty covering move from 29 Feb 2016 low 6825.
There is no change in wave counts on this chart, as it seems wave (1) completed from 6825-7094 and wave (2) completed from 7094-6969 then wave (3) started from 6969. Wave (3) started slow but extended sharply later without even 23% correction in between.
The bounce from 6969 is straight without even a 23% correction in between and with unfilled gaps. So, it is bit difficult to identify waves but most probable counts I have shown on charts. May be it is inner wave (iv) of (3) is in progress, please read carefully on chart.
Now, let’s have a separate look at bounce from 6969 which I have shown as start of inner wave (3) on above chart.
This is again 5 minutes time bar chart of Nifty covering move from 6969 which I have show as start of inner wave (3) on first 15 minutes chart.
- It seems wave (1) complete from 6969-7150.
- Wave (2) completed from 7150-7128 which is not even 23%.
- Wave (3) may be completed from 7128-7505 which is highly extended.
- Wave (4) may be completed from 7505-7442 as “Irregular Correction” or is still in progress as it is again not even 23%. 23%-38% of whole bounce from 6969 is placed at 7378-7300.
- If wave (4) is completed at 7442 then wave (5) needs to project minimum 38%-61% which is placed at 7646-7773.
On the other hand, the bounce from 6969-7527 is with three unfilled gaps and carrying the personality of wave (3) but there is not even a 23% correction within this whole move of 500 plus points. And wave is getting slower at higher levels and became flat at top which is suggesting either a very sharp bounce of 38%-61% or a sharp decline if 23%-38% very soon.
So, wave counts are not confident but a decline till 7378-7300 or bounce till 7646-7773 is expected very soon.
Conditions on chart are suggesting a bounce till 7646-7773 or a decline till 7378-7300 very soon and it is difficult to identify a one sided move from here. But we can see a good move either side very soon as wave is already consolidating between 7450-7500 from last 3 days and these conditions can be used as hedge trading.
For Positional hedge trading, Nifty Call options are available very cheap having IV of 10-11 only whereas Put options are costly having IV of 20 plus. So, one can Sell Nifty April Futures and Buy Nifty April 8000 Call in ratio of 1:8, means if you are selling 1 lot Nifty April Future then Buy 8 lots Nifty 8000 call as hedge and hold for some days or till you get reasonable profit. 200-300 points move either side in next 7-10 days can give good profit.
And for intraday or very short term trade, wait for Nifty to show at least 23%-38% correction so that a very short term pattern can be identified.
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