Further Elliott Wave Analysis Updates of Nifty for 19 Feb 2018 Onward

| February 18, 2018

This analysis report is further update on my last analysis report ( Nifty can Bounce Sharply towards 10759-10829 Very Soon ) because short term pattern explained on this report was negated.

Nifty opened higher at 10596, registered high 10612 but failed to sustain at higher levels and traded with negative bias for rest of the day. Nifty declined by more than 170 points from high to register day’s low 10434 and closed 93 points down at 10432.

Yesterday, personality of the bounce from low was not suggesting any bigger reversal for new high and possibility of one more low below 10276 was still there in coming days from present levels or from 10637-10829.

For short term, a quick bounce towards 10759-10829 was expected and trading strategy was buying on Dips. Buying was suggested in 10500-10456 range with exact stoploss of 10455 for upside targets 10759-10829 but stoploss of 10455 was triggered. Now, let’s have a fresh look at latest charts for further scenario.

There is slight change in medium/long term counts. So, this analysis report is covering bounce from low 6825 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 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 from 6825 which I am expecting as start of wave {[v] of [3] of (iii)} of larger (3) on monthly chart.

It seems inner wave 1 of [v] completed from 6825-8968, 2 completed at 7893 and wave 3 may be in progress.

And within wave 3 started from 7893, there is small but identifiable correction from 10137-9687, so 10137 can be inner wave (iii) of 3 followed by (abc) correction from 10137-9687. But the later bounce from 9687-11171 is also 3 waves move followed by sharp decline. So, there are 02 possibilities: –

  1. Either wave (iv) of 3 completed at 9687 and wave (v) in progress
  2. Or wave (iv) is still in progress as Irregular Correction with wave (A) completed from 10137-9687, Irregular (B) completed from 9687-11171 and wave (C) in progress from 11171.

This chart is showing two possibilities, so need concentrate on decline from 11171 to calculate further move until we get clarity on daily chart.

Elliott Wave Counts of Nifty on 30 Minute chart

Elliott Wave Counts of Nifty on 30 Minute chart

This is 30 minute time bar chart of Nifty covering decline from all time high 11171 which is the start of downward impulse.

It seems an Impulse is already completed from 11171-10276 with extended wave (5) as marked on chart. This downward Impulse can be wave (A) of Simple Zigzag or wave (C) of Irregular Correction.

If this Impulse is wave (A) then normal 38%-61% retracement for wave (B) is placed at 10617-10829. So, 10617-10829 is the expected upside range in this case whereas 10617 is already achieved.

Other Possibility:

But inner wave (5) [started from 10702] of this downward impulse is highly extended but next bounce didn’t retrace this whole wave (5) with speed. (Extended wave 5 often retraces 100% with speed, personality of extended wave 5)

So, this condition is favouring that the bounce started from 10276 is some sort of corrective pattern and Nifty still has possibility to decline below 10276 once again in coming days either from present levels or from 10637-10829 range.

On the other hand, the bounce after completion of this downward impulse is slower and retraced only 38% (38% retracement is placed at 10617) and Nifty is struggling to breaks this 38% retracement and failed thrice.

So, there is also a possibility that it is wave (3) completed at 10276, 38% retracement (slightly more than 38%) till 10637 is wave (4) and wave (5) is in progress from 10637. The same possibility I had explained on separate chart below: –

Elliott Wave Counts of Nifty on 30 Minute chart

Elliott Wave Counts of Nifty on 30 Minute chart

This is again 30 minute time bar chart of Nifty covering decline from all time high 11171 explaining the possibility that wave (3) completed at 10276, (4) completed at 10637 and (5) may be in progress.

Minimum 38%-61% projection for wave (5) is placed at 10295-10083 in this case and 10276 is the end of wave (3). So, 10275-10083 is the minimum targets range for wave (5) in this case.

I am not able to conclude if it is wave (3) completed at 10276 or (5) completed at 10276 because the decline from 11171-10276 is very sharp with huge gaps and it is difficult to identify inner waves.

Again there are 02 possibilities on this chart. So, let’s analyze the decline started from 10637 separately on lowest possible time frame chart to check if we can identify something.

Elliott Wave Counts of Nifty on 15 Minute chart

Elliott Wave Counts of Nifty on 15 Minute chart

This is 15 minute time bar chart of Nifty covering decline from 10637 which I had marked as end of wave (a) or (4).

  1. The first decline from 10637-10398 looks like a (abc) which is corrective pattern.
  2. Next bounce from 10398-10618 looks like an impulse which I can assume as wave (A or 1)
  3. Next decline from 10618-10434 is 3 waves move till now with wave (a or 1) from 10618-10511, (b or 2) from 10511-10612 and (c or 3) from 10612-10434. 38% retracement of wave (c or 3) is placed at 10504.

So, 10504 can be assumed as immediate breakeven point on upside above which further short term bounce can be expected. Nifty is still in short term negative zone as long as trading below 10504.

Conclusion

All the chart are indicating dual possibilities which is making it difficult to conclude exact outlook and exact outlook can be calculated only  after negation of any one possibility. But overall scenario I had explained below: –

For Medium Term, the personality of the bounce from low 10276 is not suggesting any bigger reversal for new high and possibility of one more low below 10276 was still there in coming days from present levels or from 10637-10829 range.

For short term, 10504 is immediate breakeven point on upside above which we can expect further bounce towards 10637-10759 otherwise Nifty has possibility to decline back towards 10276-10088.

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

Trading Points of View:

Overall outlook is indicating one more decline below 10276 in coming days but there is also a possibility for bounce towards 10637-10759 before the decline and 10504 is immediate breakeven point between these two possibilities. So, it is difficult to decide an exact short trade based on breakeven point in advance because possibilities are equal on both side. Exact trade can be decided during market hours only after seeing fresh move.

But we can initiate intraday trades with the help of “Breakeven Point” and “Opening Price”. Any good one sided move can be caught with this strategy with low risk otherwise patient traders can ignore this strategy.

So, note down tomorrow’s opening price and wait for first 15 minutes: –

Nifty if “trades above opening price after 9:30 AM” and “breaks above 10504” (both conditions must match) then Buy Nifty above 10504 using stoploss of day’s low (low made till 9:30 AM) and hold longs for Intraday. Initiate trade only if stoploss is 30-35 points.

Nifty if “trades below opening price after 9:30 AM” and “fails to breaks above 10504” (both conditions must match) then Sell Nifty above 10504 using stoploss of day’s high (high made till 9:30 AM) and shorts for Intraday. Initiate trade only if stoploss is 30-35 points.

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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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