Further Elliott Wave Outlook and Trading Strategy of Nifty for 05 July 2017

| July 4, 2017

Nifty opened higher at 9645 and registered day’s high 9650 but failed to sustain at higher levels and declined by 55 points to register day’s low 9595 followed by bounce again. Finally, Nifty closed just 1 point down at 9613.

Yesterday, further bounce towards 9649-9690 was expected followed by the possibility of decline towards low below 9448 and suggested to Buy 9800 July Put in 9649-9690 range with stoploss of 9699 expecting targets below 9448 in coming days. Nifty bounced above 9649 and declined till 9595 and 9800 July Put bounced from 189 to 226 and closed at 201. Let’s have fresh look at latest charts for further scenario.

Today I am analyzing bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my “All time frame” analysis report Elliott Wave Analysis of Nifty using All Time Frames

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 24 Dec 2016 low 7893. 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.

I am not showing any wave counts on this chart because the bounce from 7893 is straight, steep and without even 23%-38% and is still carrying the personality of some sort of wave 3.

I added this chart just to calculate Fibonacci levels. So, 23%-38% retracement of whole move (from 7893-9709) is placed at 9280-9015. So 9280-9015 is the expected targets range if any bigger correction is started.

Now, we need to analyze decline from all time high 9709 separately for more depth and clarity.

Elliott wave counts of Nifty on 30 minute chart

Elliott wave counts of Nifty on 30 minute chart

This is 30 minutes time bar chart of Nifty covering decline from all time high 9079. 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 pattern of first decline from 9709-9560 is not clear because of repeated overlapping of waves within it, but I am assuming it as (abc) after seeing the later wave pattern. Next bounce from 9560-9698 and further decline from 9698-9448 also is also a combination of repeated (abc) waves as shown on chart.

This type of repeated (abc) cycle forms within Complex Corrections only (Double Zigzag or Triple Zigzag). I am not able to identify the exact pattern but the whole structure is indicating it as some type of corrective pattern as of now and there are possibilities of high above 9709 again in coming days.

Further, very last (abc) wave from 9575-9448 is indicating the possibility of Irregular Correction at bottom with wave (a) from 9473-9575, Irregular wave (b) from 9575-9448 and wave (c) in progress from 9448.

So, there is possibility of decline below 9448 again after completion of wave (c) of Irregular Correction. And we need to analyze wave (c) separately on lowest possible time frame.

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 bounce from 9448 which I am expecting as start of wave (c) of Irregular Correction.

It seems wave (1) completed from 9448-9502, wave (2) may be completed from 9502-9475, wave (3) may be completed from 9475-9650 and wave (4) may be completed from 9650-9595 or still in progress.

In my last report, I marked end of wave (3) at 9618 and expected 9649-9690 for wave (5). But the pattern of decline from 9650 looks corrective and not convincing for reversal. So, may be wave (3) completed at 9650 and wave (5) is still pending. Nifty needs to open gap down or fall sharply for reversal.

38% retracement of wave (3) is placed at 9583 which can be referred as breakeven point or stoploss for longs.

Conclusion

Same as I explained in my last analysis report, whole pattern of decline from 9709 became complex and confusing because of repeated overlapping of waves within it. The whole structure of the decline is indicating it as some type of corrective pattern and bounce above 9709 is possible in coming days but we need some clarity in pattern to calculate lower range.

For short term, Nifty achieved 9649 but the pattern of decline from 9650 is still not convincing for reversal and Nifty still have possibility to bounce further towards 9650 and 9583 can be referred as breakeven point or stoploss for longs.

Nifty needs to open gap down below 9583 or decline sharply for present levels to initiate reversal.

Trading Point of View:

The safe trading strategies according to conditions on charts would be: –

  1. Nifty 9800 July Put bought today at 9649 can be hold with fresh stoploss of 9641 (02 points above 9639) expecting same targets below 9448. But exit this trade if Nifty fails to break below 9683 within 2-3 hours tomorrow OR if Nifty even touch 9461 and wait for next opportunity.
  1. Nifty if decline near 9583 but fails to trade lower below 9583 within 2 hours then small risk can be taken to buy Nifty near 9583 with stoploss of 9571 (some points below 9583) expecting targets above 9650.

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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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