Fresh Elliott Wave Update of Nifty as on 25 Sep 2018

| September 25, 2018

Nifty opened bit higher at 11164, registered high 11170 but declined sharply and traded with negative bias for rest of the day. Nifty declined by about 200 points to register day’s low 10943 and closed 175 points down at 10967.

Yesterday, Nifty had possibility to bounce towards 11346-11760 in coming days but need to bounce sharply to support the same. 11072-11044 and 11990-11935 were supports.

Trading strategy was to buy 11600 Call of Oct expiry in 60-40 range using stoploss of 27. But Nifty didn’t bounce as expected and stoploss for the trade was triggered.

Nifty declined without completing the pattern at top which is confusing since couple of weeks. It seems a complex type of pattern is forming at higher time frame, so 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.

It seems inner wave 1, 2 is completed and 3 may be in progress from 7893. Within wave 3, it seems inner wave i, ii, iii, iv completed at 9687 and v may be in progress.

But after 9687, the bounce is a combination of 3 waves. So, there is a possibility of Ending Diagonal Pattern after 9687 as wave ‘v’. If this is the case then this ED is going on since Jan 2018, so whole pattern may take long time to complete.

The possibility of ED is just for awareness and not confirmed yet. So, we need to concentrate on decline started from 11760 to calculate immediate move until larger pattern gets clear.

Elliott wave counts of Nifty on 30 minutes chart

Elliott wave counts of Nifty on 30 minutes chart

This is 30 minutes time bar chart of Nifty covering decline after 11760 which I am expecting analyzing independently because there is bit confusion on higher time frames.

There is impulse completed from 11760-11269 and same can be assumed as wave (A), Irregular Correction from 11269-11523 can be marked as wave (B) and wave (C) may be in progress.

Within wave (C), it seems inner wave (i), (ii), (iii) completed till 10866 and wave (iv) or (v) may be in progress. Wave (iii) retraced deeper than 38% and bounce from 10866-11191 is Impulse which is making it difficult to identify if wave (iv) or (v) in progress.

So, let’s analyze the pattern of bounce started from low 10886 to get further idea.

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 10866 which I am analyzing independently. It is difficult to count inner waves because move is very steep but we can observe a sharp Impulsive bounce from 10866-11191 followed by slower decline.

So, Impulsive bounce from 10866-11191 can be marked as wave (A or 1) [it can also of (C) of Irregular, although I am not able to identify any such pattern], and wave (B or 2) may be in progress.

Within wave (B or 2), it seems inner wave (a or 1) may be completed from 11191-11008, wave (b or 2) may be completed from 11008-11177 and wave (c or 3) may be in progress.

Within wave (c or 3), it seems inner wave (i), (ii), (iii) is completed and (iv) or (v) may be in progress. 23%-38% retracement of wave (iii) is placed at 11000-11034. So, 11000-11034 is immediate resistance and 11034 is immediate breakeven point.

Conclusion

Nifty declined from 11760 after completing 3 wave’s move (without completing Impulse pattern). I was expecting bounce for new high because pattern needs to be completed and but Nifty declined more than expected waves are also overlapped. I also missed selling opportunities and made repeated wrong trades because of this scenario.

Nifty cannot reverse without completing the pattern. So, either I am not able to identify exact pattern or a very complex pattern in progress on higher time frame. And I identified the possibility of Ending Diagonal Triangle Pattern (ED) started from 9687 since Jan 2018.

The Ending Diagonal is just a possibility for awareness and not confirm yet. But if this is really an ED and running since 08 months then coming months are going to be tougher with lots of confusions because Diagonal Triangle is a complex pattern and last phase of ED is known for abnormal moves. So, I will keep watch on this possibility and will update as required.

For very short term/Intraday, 11000-11034 is immediate resistance and 11034 is immediate breakeven point. Nifty if manage to break and stay above 11034 for 15 minutes then further bounce towards 11177-11191 can be expected otherwise Nifty can fall further. 

Trading Points of View:

Conditions are not confident for positional trade. I need to wait for clarity in pattern to decide any positional trade.

For very short term/Intraday: – 11000-11034 is immediate resistance and 11034 is breakeven point. Buying can be done after break above 11034 only (if Nifty stay above 11034 for 15 minutes), otherwise further fall is expected, same 11034 can be used as stoploss for any shorts. So, traders can plan their own trade based on these levels and conditions.

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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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