Fresh Elliott Wave Outlook of Nifty for 29 Nov 2018 Onward

| November 28, 2018

Nifty opened higher at 10708, registered low 10699 and bounced further to resister day’s high 10757. Finally, Nifty closed 43 points up at 10728.

Yesterday, 10695-10744 was good resistance and Nifty was expected to decline sharply towards 10596 without breaking much higher above 10744.

Trading strategy was to buy 10600 Put of Dec expiry or 10700 Put of Nov Expiry in 10695-10744 range using exact stoploss of 10751 expecting sharp decline towards 10596. But Nifty bounced further above 10744 and stoploss of 10751 was triggered. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott Wave Counts of Nifty on Daily Chart

Elliott Wave Counts of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. This is the same chart with explanation which I had explained in my last analysis report because there is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be in progress as Irregular Correction with inner wave (A) of ‘4’ completed from 11171-9951 as Impulse, wave (B) may be completed from 9951-11760 as (abc) and wave (C) may be in progress.

Wave (C) of Irregular Correction normally completes at or after the end of wave (A) which is 9951. And 38% retracement of wave ‘3’ is placed at 9918. So, 9951-9918 is general expected range for completion of Irregular Correction in this case. Otherwise, wave (C) already achieved its minimum requirements and projections.

If Irregular Correction already completed at 10004 then Nifty must bounce straightway for new life time high in quick time.

So, let’s analyse the decline started from 11760 to check if wave (C) of Irregular Correction started from 11760 is already completed or not.

Elliott Wave Counts of Nifty on 5 hourly Chart

Elliott Wave Counts of Nifty on 5 hourly Chart

This is 5 hourly time bar chart of Nifty covering decline after 11760 which I am marked as start of wave (C) of Irregular Correction. Again, there is no major change in wave counts on this chart.

I am considering wave (C) of irregular correction is completed from 11760-10004 because the Reflex Point based on these wave counts is 10710 and first impulse from low 10004 is completed above 10710.

So, there is possibility for bigger reversal for new high but this move is very big of about 1700 points. So, we need to proceed step by step and must concentrate on the internal pattern of bounce (started from 10004) to make our trading decisions.

So, let’s have a separate look at bounce started from 10004 to identify further move.

Elliott Wave Counts of Nifty on  hourly Chart

Elliott Wave Counts of Nifty on hourly Chart

This is hourly time bar chart of Nifty covering bounce after 10004 which I am analysing independently.

It seems wave (1) completed from 10004-10285 (pattern is not confident), wave (2) may be completed from 10285-10105, wave (3) may be completed from 10105-10645, wave (4) may be completed from 10645-10440 and wave (5) may be completed from 10440-10774. Overall, an Impulse seems completed from 10004-10774.

Minimum 23%-38% retracement of this whole impulse is placed at 10592-10479 and next 61% retracement is placed at 10279. Nifty already entered in minimum 10592-10479 range and if it manages to break below 10479 can decline further towards 10298. But Nifty registers low 10489 and bounced back near high again.

From high 10774, the decline from 10774-10489 seems impulsive and same can be marked as wave (a or 1) but wave (b or 2) retraced more than 78% in this case.

Overall, there are conflicts between wave counts and Fibonacci retracement/projection on this chart. So, we will ignore this chart for time being and will concentrate on bounce started from 10489 to calculate immediate outlook.

Elliott Wave Counts of Nifty on  5 minutes Chart

Elliott Wave Counts of Nifty on 5 minutes Chart

This is 5 minutes time bar chart of Nifty covering bounce from low 10489 which I am analysing independently.

Earlier I was marking wave (3) completed at 10637, (4) completed at 10596 and (5) in progress from 10596 because bounce till 10637 was sharp (carrying the personality of wave 3), the correction from 10637-10596 was only 23%-38% (normal projection for wave 4) and next bounce was slower.

But wave (5) projected more than 100% in that scenario which is a rare case. Wave 5 can project more than 100% but in very rare cases. It happened last week when I was expecting decline of 180-280 points and that decline happened but our stoploss triggered because wave 5 projected more than 100%. So, I am taking alternate wave counts because wave 5 projecting more than 100% is not normal.

Now, it seems wave [a or 1] completed from 10489-10637, wave [b or 2] completed from 10637-10596 (retraced only 23%-38%) and wave [c or 3] may be in progress.

Normal 100%-123% projection for wave [c or 3] is placed at 10744-10778 and Nifty already entered in this range but pattern of wave [c or 3] is not clear.

38% retracement of progress of wave (c or 3) is placed at 10695. So, 10695 is immediate breakeven point on downside and Nifty if breaks and stay below 10695 for 15 minutes can decline further towards 10596-10489.

Conclusion

For Medium/Long Term: – There is no change in medium/long term outlook, the first Impulse from low 10004 bounced above Reflex Point 10710 which is indicating first sign of bigger reversal for new high above 11760. Now, Nifty can decline below 10004 only if the overall correction started from 11760 turns into Irregular/Complex Correction.

Wave (C) is very big, so we need to proceed step by step and must concentrate on the internal pattern of bounce started from 10004 to decide further trades.

For short term: – There are conflicts between wave counts and Fibonacci calculation within short term pattern. Wave counts are not confidently justifying Fibonacci Calculations and vice-versa. So, there is low confidence in overall short term outlook and we need to wait for some clarity.

We just have 10695 as immediate breakeven point on downside. Nifty can be assumed in positive zone as long as trading above 10695, otherwise Nifty if breaks and stay below 10695 continuously for 15 minutes can decline further towards 10596-10489. 10695 can also be used as stoploss for any longs.

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

Trading Points of View:

There is low confidence in short term pattern and outlook so it is difficult to suggest a confident trade in advance.

Fibonacci retracement wise, Nifty if manages to break below 10695 continuously for 15 minutes then any bounce towards 10695-10725 can be used to buy suitable Puts of Dec Expiry using stoploss above 10757 expecting decline towards 10596-10489.

Trade in light quantity and in options only because pattern is not completely clear and stoploss is big. Safe traders must wait for clear and confident opportunity.

Those who want to buy or holding longs can use 10695 (some points below 10695) as stoploss.

Important Point for traders: I received queries from some new clients that they faced heavy loss because of 2-3 wrong trade in last 2 weeks.

I always advise and my old clients also know that taking big risk on a single trade can only result in loss, nobody can survive in stock market by talking big risks. You can make some reasonable amount for a day or week or month by talking big risk but you will definitely lose it someday, a single wrong trade is enough to wipe out whole capital.

So, always adjust your trading quantity according to risk distribution. You must be able to trade in same quantity even after 10 continuous wrong trades but most of the trades lose their whole capital in just 2-3 wrong trade.

On my analysis part, please never get greedy and over-excited after seeing my successful analysis for 5-10 days. It is no necessary that I will continue be succeeding in future, there are 100% chance to be wrong every next time. An analyst can just make conclusions based on reasoning and calculations but I can’t control the market.

I can be wrong in identifying the pattern sometimes, or pattern can change from simple to complex or waves can project/retrace abnormally or we can even miss the opportunity some time even if we are right. So, learn to have patience and to control the greed, decide how much risk you can take per trade and be strict to it, adjust your quantity if stoploss is big. Risk Management is more important than analysis.

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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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