This analysis is part of my “Elliott Wave Analysis Report of Nifty for 10 Jun 2016” which I prepared yesterday and sent yesterday to my student/subscriber and I am posting here for my students/learners for their future reference as there is good example of “Ending Diagonal Triangle (ED)” in this report. This analysis report is not complete and doesn’t include any market outlook.
Nifty opened flat today at 8273, declined below 8250 within fraction and traded with weakness for rest of the day. Nifty declined almost 90 points from opening before closing 69 points down at 8203.
Yesterday I mentioned 8252 as strict stoploss for any existing/fresh longs and any reversal can be only below 8240. Nifty broken 8252 with fraction after opening and further declined till 8184 after breaking below 8240. Breakout/reversal levels worked better but any trade in these types of situations can be decided during market hours only because exact stoploss for the trade can be calculated only by seeing the pattern formed after breakout. Those who learned and understood EWT can use these types of situations better for profitable trade. Let’s look at the latest wave counts now.
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 move without even a 10% correction in between.
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. Even if the pattern I have shown is wrong then also a minimum 23% retracement is reasonably due.
Earlier I was waiting for clarity in pattern formed at top with overlapping of waves, it looked like Ending Diagonal (ED) but I was not able to find exact pattern following all the rules. Now, there is one possibility for the formation of ED at top started from 8118 but the only problem/confusion is that we have not seen a convincing wave (4) before start of this ED as there is not even 10% correction in within the whole bounce started from 7715 till the start of this ED. Because ED is always wave (5) and there must be wave (4) before it, but there corrections are so small and negligible which can’t be identified.
So, let me explain the possibility of this ED on separate chart.
This is again 30 minutes time bar chart of Nifty covering move from 27 May low 8118 which I have shown as start of expected ED on previous chart.
This whole pattern is following all the rules and guidelines of Ending Diagonal Triangle as:
- This pattern has formed at top after a very sharp bounce, so there is possibility that it is wave (5).
- This move has 3-3-3-3-3 pattern where all the 5 waves have (abc) pattern.
- Wave (iii) is less than 161% thus not extended and wave (v) is more than 61% thus extended.
- Line joining waves (i)-(iii) and (ii)-(iv) are absolutely clear without disturbance.
This chart explaining Ending Diagonal (ED) I have included for learning purpose to show how it actually looks like following all the rules and guideline as I am going to prepare an special article explaining Ending Diagonal (ED) in depth and this chart would be the best practical example as it is not old but just formed. Learners please look at it carefully after reading the special article on ED tomorrow.
Now we need to analyze decline from 8294 to conclude further Nifty movement and to prepare any trading strategy.
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