Fresh Elliott Wave Analysis of Nifty for 11 Oct 2018

| October 11, 2018

Nifty opened higher at 10331, registered low 10318 but bounced further and traded with positive bias for rest of the day. Nifty bounced by more than 180 points to register day’s high 10482 and closed 159 points up at 10460.

Yesterday, 10275-10240 was strong support and one bounce of minimum 150-200 points was expecting soon. 10559 was medium term breakeven point on upside.

Trading strategy was to buy Nifty Futures or suitable call in 10275-10240 range using exact stoploss of 10239 expecting minimum 150-200 points bounce soon. Expected bounce of 150-200 points happen but Nifty opened gap up and didn’t give chance to buy at lower levels. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after all time high 11760 and earlier wave counts are explained in my previous analysis report Fresh Elliott Wave Outlook of Nifty for 08 Oct 2018 Onward

Elliott Wave Analysis of Nifty on Hourly Chart

Elliott Wave Analysis of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering decline after 11760 which I am analyzing independently because there are multiple possibilities on higher time frames.

The decline is very sharp without any reasonable pullback and carrying the personality of Impulse but I am not able to identify inner wave counts for Impulse right now.

Wave counts wise, the decline seems corrective as Double Zigzag Correction with first (abc) cycle completed from 11760-10866, wave (X) completed from 10866-11191 and 2nd (abc) may be completed from 11191-10198 or still in progress. Normal 100%-123% projection for 2nd wave cycle is placed at 10297-10086 which is already achieved.

38% retracement of progress of last wave (C) [started from 11145] is placed at 10559. So, 10559 is breakeven point and we can think of any bigger reversal after break above 10559 only.

Now, we need to analyze bounce after 10198 to calculate immediate levels.

Elliott Wave Analysis of Nifty on 5 minutes Chart

Elliott Wave Analysis of Nifty on 5 minutes Chart

This is 5 minutes time bar chart of Nifty covering bounce after recent low 10198.

It seems wave (A or 1) completed from 10198-10397, (B or 2) may be completed from 10397-10280 and wave (C or 3) may be in progress. Normal 100%-123% projection for wave (C or 3) is placed at 10479-10525 which is already achieved.

23%-38% retracement of progress of wave (C or 3) is placed at 10434-10404. So, 10434-10404 is immediate support and 10404 is immediate breakeven point on downside. Nifty if break and stay below 10404 can decline further towards 10280-10198.

The speed of wave (C or 3) is bit slower so probabilities are indicating one more fall for new high. Nifty needs to bounce sharply hereafter to gain the personality of wave (3).

Conclusion

There is no change in bigger picture, Nifty declined without completing impulsive pattern at top. So, reversal is expected to be sharp and strong whenever it happens. 9951-9918 is next strong support for possibility of Irregular Correction and Nifty is expected to reverse strongly if reverse from 9951-9918 range otherwise we need to check for otherwise possibility if breaks lower below 9918.

10559 is breakeven point on upside and any bigger reversal can be expected after break above 10559 only.

For very short term or Intraday: – 10434-10404 is immediate support on downside and 10404 is breakeven point. Nifty if breaks and stay below 10404 for 15 minutes can fall further towards 10280-10196.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

Overall Nifty is in negative zone as trading below breakeven point 10559 and speed of wave (C or 3) getting slower indicating cautions for further decline.

So, Nifty if breaks and stay below 10404 for 15 minutes then any bounce can be used to sell Nifty or Buying Suitable Put expecting further decline towards 10280-10198 using stoploss of 33-43 points. Actual stoploss is high of this ongoing bounce but it will be big. So, traders who want to trade with big stoploss can trade in options by buying slightly out of money Puts.

10399 (some point below 10404) is trailing stoploss for any existing longs.

Tags: , ,

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"

Comments are closed.