Elliott Wave Updates and Outlook of Nifty for 21 Aug 2015

| August 20, 2015

Nifty opened mild gap down today and bounced till 8500 to fill the gap followed by downward consolidation till mid-session. But later Nifty gave break out from smaller Triple Zigzag correction (explained later) and crashed 140 points from day’s high. Finally Nifty gave downward jerk which I was expecting from last 3 sessions and also warned in yesterday’s report. Finally Nifty closed 122 points down at 8372 after giving low of 8359. Let’s have a look on latest charts.

Today I am showing probable wave counts only after July high 8655 as previous counts are same as I explained in my yesterday’s analysis report of Nifty. Read   Nifty Seems Sell On Rise Till Aug 2015 Expiry – Elliott Wave Analysis on 18 Aug 2015.

Elliott wave Counts of Nifty for 21 Aug

Elliott wave Counts of Nifty for 21 Aug

This is 3o minutes time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of correction after completion of Impulse.

By seeing the structure of waves, It seems wave (A) completed from 8655-8321, wave (B) completed from 8321 to 8621 ( there may be a Irregular correction pattern at bottom as move from 8321-8621 looks like impulsive rather than corrective). And there may be start of wave (C) from 8621 which needs to break end of wave (A) at 8321 at least and further can go till 100%-123% which is placed at 8287-8208.

I am going with calculations only and not showing inner wave counts of (C) to avoid confusion because counts are not convincingly clear. We have a downward move today to calculate stoploss so will concentrating on wave counts of today’s fall only keeping in mind the previous waves. Let’s have a look on decline after yesterday high 8520 on separate 5 minutes chart.

Elliott wave Counts of Nifty for 21 Aug

Elliott wave Counts of Nifty for 21 Aug

This is 5 minutes time bar chart of Nifty covering move after 19 Aug high of 8520. The move after 8520 seems impulsive in nature which seems somewhere within wave (3) as shown on chart. Wave 3 may complete somewhere below 8337 followed by corrective bounce of 23%-38% and then wave (5) downwards.

But that may not be the end as there are 2 move waves before 8520 which is from 8530-8428-8525-8520. So, possibilities are there for more declines even from current levels. We must carry shorts with trailing stoploss rather than booking full profit. Now, stoploss for existing shorts can be above 38% retracement of wave (3) which is placed at 8414. So, 8421 can be the trailing stoploss for shorts.

Triple Zigzag Correction – Most Profitable low risk and high reward Selling Opportunity.

There is a small Triple Zigzag Correction with 8465-8776 range between 12:00-1:00 PM which I identified and also posted chart in face book group just after break out.  I marked this pattern on above chart but It can better be seen on 1 minute’s time bar chart. Have a look on below chart.

Example of Triple Zigzag Correction on real time chart.

Example of Triple Zigzag Correction on real time chart.

This is 01 minute time bar chart of Nifty showing a Smaller Triple Zigzag Correction within 8465-8478 I identified at completion and posted chart on my face timeline. It was a great selling opportunity as price never enters in the pattern again after breakout and move after breakout is always faster and bigger. Breakout happened at 8470 and Nifty could be sold with stoploss of 8475 (lower line joining X1 and X2). Nifty decline 110 points after breakout.

Again it shows why you need to learn Elliott Wave Theory yourself so that you can identify patterns on charts during live market hours to take timely entry whenever you see such great profitable opportunity. This pattern took almost 40 minutes to complete and within 15 points range only but see the result. You don’t need to see anything else, not even news, data, trend lines etc. These single Elliott Wave Patterns will indicate what market is going to do next.

These Elliott Wave Pattern can make you rich if you know the rules to identify it and if you have patience to wait for perfect opportunities. This pattern happens frequently on every time frame with same rules, calculations and structures.

Read this article Triple Zigzag Correction of Elliott Wave Theory Explained by Deepak Kumar to know the rules, calculations and importance of this pattern and to know how this single EWT pattern can make you rich.

Conclusion:

Nifty declined sharply today more than 120 points which we already expected yesterday and suggested to sell for minimum target 8321 using stoploss of 8651. Now, Nifty achieved 8360 and there is scope for more declines below 8321. Stoploss for existing short should be 8421 which is some points above 38% retracement till wave 3.

We must carry our shorts with trailing stoploss as decline till 8200 and below is also possible. Trading strategy should be “Selling on Rise” only. Any 23%-38% bounce can be used for selling with stoploss some points above 38%.

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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"

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