Further Elliott Wave Analysis Update of Nifty for 02 May 2018 Onward

| May 1, 2018

Nifty opened higher at 10705, registered low 10704 and bounced sharply just after opening. Nifty traded with strength for whole day and bounced more than 60 points to register day’s high 10759 and finally closed 47 points up at 10739.

Yesterday, short term outlook was bullish with 10575-10486 as short term support range but expected a possibility of Ending Diagonal pattern at top started from 10509 indicating decline towards 10585-10559 without breaking above 10746.

Trading strategy was to hold strategic shorts or Nifty puts taken in 10666-10696 range using exact stoploss of 10747 expecting 10585-10559 as downward targets. Nifty bounced above 10747 which negated Ending Diagonal Pattern and our stoploss for the trade was triggered. A big stoploss of about 80 points triggered after a long time. Now, let’s have a fresh look at latest charts for further scenario.

This Analysis Report is further update on my last analysis report Nifty Outlook and Trading Strategy for 27 April 2018 Onward because the pattern expected in previous report is negated after break above 10746 and that analysis report is no more valid. And this analysis report is covering the move after all time high 11171.

Elliott wave analysis of Nifty for 02 May 2018

Elliott wave analysis of Nifty for 02 May 2018

This is 5 hourly time bar chart of Nifty covering decline from all time high 11171 which I had marked as end of inner wave (b) of {iv of 3 of [v] of [3] of (iii) of (3)} on larger time frame. There is the same chart which I had explained in my last analysis report because there is no change in wave counts on this chart.

It seems an impulse completed from 11171-9951. If this impulse is really wave (c) of Irregular correction then next impulse started from 9951 needs to complete above 11171 but if I am wrong at identifying and this impulse is wave (a) or (1) then 61% retraced of this impulse is already achieved after breaking above 10704.

So, we need to concentrate on progress of bounce started from 9951 to calculate immediate further moves.

Elliott wave analysis of Nifty for 02 May 2018

Elliott wave analysis of Nifty for 02 May 2018

This is 1 Hour time bar chart of Nifty covering bounce after low 9951 which I am analyzing independently. I spent an hour to look at this move from different angles and different time frames but could not conclude any confident pattern. Whatever I could understand I tried to explain on this chart.

It seems wave (A or 1) completed from 9951-10229, wave (B or 2) completed from 10229-10111 as Irregular Correction and wave (C or 3) may be in progress.

It is difficult to identify inner waves of (C or 3), the only thing I can identify confidently is that there is Double Zigzag Correction completed from 10638-10536 and new upside impulse has been started from 10536.

I can’t say exactly which waves this impulse (started from 10536) is within overall pattern but we can analyze this impulsive move independently to calculate immediate movement until we see any clarity.

So, let’s have a separate look at progress of Impulse started from 10536 on lowest possible time frame chart to calculate immediate moves :-

Elliott wave analysis of Nifty for 02 May 2018

Elliott wave analysis of Nifty for 02 May 2018

This is 15 minute time Bar chart of Nifty covering decline from 10638 which I am expecting as completion of Double Zigzag Correction followed by upside impulse.

A Double Zigzag Correction (abc-X-abc) has been completed from 10638-10536 and new impulse is in progress from 10536.

And within the upside impulse started from 10536, it seems inner wave [1] completed from 10536-10595, wave [2] completed from 10595-10559, wave [3] completed from 10559-10759 and wave [4] may be already completed from 10759-10721 or still in progress.

23%-38% retracement of wave [3] is placed at 10711-10682. So, 10711-10682 is immediate support range on downside and 10682 is breakeven point below which we can think of any downward reversal. Nifty can show one more leg upside after a small correction.

Conclusion

For long term, Nifty is still bullish and has long way to go as explained in my last “All Time Frames” report but we are not sure if bottom is already made or still pending. Nifty can bounce from present levels also and Maximum estimated bottom range is 9800-9600 based on Fibonacci retracements.

For short term also Nifty is in bullish zone but we need to wait for approximate 150-240 points correction [23%-38% retracement of wave (C or 3)] to decide any further positional trade.

For immediate move, 10711-10682 is immediate support on downside and 10682 is immediate breakeven point below which we can think of any downside reversal. Nifty can show one more leg upside after a small correction.

Trading Points of View:

Nifty already bounced about 600-800 points in straight line without any reasonable correction. So we need to wait for at least 150-240 points correction to plan any positional trade after confirming with the pattern of this correction. We can trade for small Intraday/very short move until then.

So, Nifty if decline in 10690-10682 range (in support range near breakeven point) then light longs or Nifty Calls can be bought with small risk of 20 points using stoploss of 10669 expecting targets above 10759. Any shorts can be planned after breaking below 10682 only.

Try to trade near breakeven point with small stoploss because we already had lost about 80 points with big stoploss. Generally I don’t suggest a trade with big stoploss and without having confidence in pattern but this time I suggested a trade with big stoploss and the stoploss triggered.

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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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