Elliott Wave Updates and Outlook of Nifty for 08 July 2016

| July 7, 2016

Nifty opened flat today at 8342 and consolidated with 8340-8320 for half of the session. Nifty bounced by 40 points in second half to register day’s high 8262 but declined again before closing 2 points up at 8337.

In my last report, I mentioned that 8317-8267 range is possible with volatility (up-down swings) and any bounce towards 8367 can be sold with 8389 expecting 8317-8267 range as minimum target. Nifty bounced till 8262 and then declined till 8323 (6 points short of 8317). Let’s have a fresh look at latest chart to conclude further scenario.

Today I am showing wave counts from 04 July high 8398 as previous wave counts are same as I explained in my last analysis report Elliott Wave Analysis and Outlook of Nifty for 07 July 2016 Onward

Elliott Wave Analysis of Nifty for 08 July 2016

Elliott Wave Analysis of Nifty for 08 July 2016

This is 5 minutes time bar chart of Nifty covering decline from 04 July high 8398 which I am assuming as progress of wave (4) till now.

It seems an impulse is completed from 8398-8319 which can be wave (A or 1), wave (B or 2) may be completed from 8319-8262 or still in progress which retraced almost 61% of (A or 1).  And further wave (C or 3) may be pending.

100%-123% projection for wave (C or 3) is placed at 8283-8264 calculated from 8262. And there is an “Irregular Correction” type of pattern formed at bottom which is again indicating a low below 8317 again.

So in normal circumstances, if (B or 2) is completed at 8262 then wave (C or 3) can decline towards 8283-8264. And same 8267-8260 is the range around which we need to look at the pattern formed again to conclude further move.

Conclusion:

Nifty started declining from 8398 and almost retraced 23% of wave (3) after hitting 8317 today and also bounced back towards 8267 which we expected for wave (B or 2) in last report. Now expected range for wave (C or 3) is placed at 8283-8264 which may be achieved in next sessions if I am right at identifying the pattern. We need to look at fresh pattern again if Nifty breaks above 8398.

So for trading point of view,

  1. Short term strategy is still selling on rise with same stoploss of 8389 expecting minimum targets 8317-8267 range. Any shorts taken today around 8360 can be hold and any bounce towards 8365-8380 can be sold again with same stoploss 8389 expecting same targets 8317-8267. Keep strict stoploss for short because if wave (4) is already completed at 8317 then Nifty can move higher above 8400.
  1. If Nifty declines towards 8283-8264 then look at the pattern there to decide next trade. Or if Nifty first break below 8283 followed by bounce above 8318 then Nifty can be bought after touch of 8318 with stoploss of 30 points expecting targets above 8399.

Keep strict stoploss on the trades as volatility can turn unprotected trades into huge losses.

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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"