Further Elliott Wave Updates of Nifty for 11 Sep 2018 Onward

| September 11, 2018

Nifty opened lower at 11570, registered high 11573 but failed to sustain at those levels and declined sharply by about than 160 points to register day’s low 11427 and closed 151 points down at 11438.

Friday, Nifty was expected to bounce further for new high above 11760 (towards 11906-12222) but bounce was expected to be sharp and fast. 11523 was trailing stoploss for all longs.

Trading strategy was to hold both the trades (11600 call of Sep expiry bought in 11459-11393 range and same 11600 call bought after breaking above 11529) using exact trailing stoploss of 11523. Nifty declined by 160 points to register low 11427 and trailing stoploss of 11523 was triggered. Now, we need to have a fresh look at latest charts for further scenario.

This analysis report is covering move after 9951 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 analysis of Nifty on Daily Chart

Elliott wave analysis of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 9951 which I marked as start of wave ‘v’ on daily chart in my last “All Time Frames” Report. There is no change in wave counts on this chart.

It seems, wave (1) completed from 9951-10929, (2) may be completed from 10929-10417 and wave (3) may be in progress from 10417.

And within wave (3), it seems inner wave (i) of (3) completed from 10417-10893 (pattern not clear), (ii) completed at 10557 as Double Zigzag correction, wave (iii) may be completed at 11760 and wave (iv) or (v) may be progress.

23%-38% retracement of progress of wave (iii) is placed at 11476-11300 and Nifty already entered in this support range and bounced back.  11300 is medium term breakeven point and any bigger reversal can be expected after break below 11300 only. Nifty achieved 11393 and bounced back.

Minimum 38%-61% projection for wave (v) is placed at 11906-12222 if wave (iv) completed at 11393. So, 11906-12222 is minimum target range on upside if correction is already completed from 11760-11393 as Simple Zigzag.

Now, we need to analyze the pattern of decline started from 11760 to check if wave (iv) completed at 11393.

Elliott Wave Analysis of Nifty on 15 Minute Chart

Elliott Wave Analysis of Nifty on 15 Minute Chart

This is 15 minutes time bar chart of Nifty covering decline after 11760 which I am expecting as start of wave (iv) of (3) on daily chart.

There is slow decline from 11760-11630 followed by corrective bounce from 11639-11751 followed by sharp impulsive decline. So, this slow decline from 11760-11639 can be wave (A or 1), corrective bounce from 11639-11751 can be wave (B or 2) and wave (C or 3) may be completed at 11393.

38% retracement of wave (C or 3) is placed at 11529 and Nifty already breached this breakeven point but declined back again to register low 11427. Now, there are multiple possibilities for the pattern of bounce after 11393: –

  1. If it is wave (3) completed at 11393, (4) completed at 11603 then 61%-100% projection for wave (5) is placed at 11376-11236. So, Nifty can give small or big bounce from 11376-11236 range without breaking much lower below 11236. We can expect bounce towards 11603 because wave 5 will be extended and extended wave (5) often retraced sharply by 100%.
  2. It is wave (C) completed at 11393 and correction is already completed then we have 02 different possibilities: –

A.      May be wave [1] completed from 11393-11523 and wave [2] may be in progress as Irregular Correction with inner wave (a) from 11523-11436, Irregular wave (b) completed from 11436-11603 and wave (c) may be in progress as explained on chart. Nifty needs to bounce towards 11760 without breaking below 11393 in this case.

B.      Wave [1] may be completed as Leading Diagonal Triangle and wave [2] may be in progress. This possibility I had explained on separate 5 minutes chart below: –

Elliott Wave Analysis of Nifty on 5 Minutes Chart

Elliott Wave Analysis of Nifty on 5 Minutes Chart

This is 5 minutes time bar chart of Nifty covering bounce from 11393.

The bounce from 11393-11603 has possibility to be Leading Diagonal Triangle with inner wave [i]>[iii]>[v] as explained on chart. But Leading Diagonal Triangle [LD] is always a wave [1].

So, may be wave [1] completed from 11393-11603 as wave LD and wave [2] may be in progress. Within wave [2], may be inner wave (a) completed at 11496, (b) completed at 11526 and (c) may be in progress.

Normal 100%-123% projection for wave (c) is placed at 11419-11393 but wave [2] can never break the start of wave [1]. So, Nifty needs to bounce towards 11760 without breaking below 11393 in this case.

It is almost impossible to identify the exact pattern out of possibilities explained in point A and B because both the patterns are following all the rules. But we should not bother because Nifty needs to bounce towards 11760 without breaking below 11393 in both the cases.

Conclusion

For Short Term,

Most of the conditions on charts are indicating bounce for new all time high above 11760 as longs as trading above 11300. Bounce can happen from present levels (without breaking below 11393) or from somewhere around 11300.

Two possibilities are indicating bounce above 11760 without breaking below 11393. But if Nifty breaks below 11393 then a small or big bounce can be expected from 11376-11236 range. Whereas, 11300 is medium term breakeven point and any bigger reversal can be expected after break below 11300 only.

It is very difficult to identify exact pattern at this point of time.

We need to keep all these conditions in mind while planning/managing trades.

Trading Points of View:

According to fresh conditions on charts: –

There is possibility for reversal without breaking below 11393 but we don’t have entry levels or upside breakeven point. So, we can take help of tomorrow opening price to initiate a low risk trade.

So, those who can take small risk can note down tomorrow’s opening price and wait for 15 minutes. Nifty if trades above opening price at 9:31 AM (15 minutes after opening) the Nifty can be bought near opening price using stoploss of 27 points (27 points below opening point). Trade can be hold for Intraday and hold for next day only if Nifty closed near the high of the day.

Small Risk takers can also buy Nifty if get in 11419-11393 range using exact stoploss of 11392.

But, if Nifty breaks below 11393 then 11376-11236 is the range from where small or big bounce can be expected. This 11376-11236 range is big to initiate any trade but 11300 is medium term breakeven point, so any decline towards 11300-11236 can be used to initiate positional systematic longs using stoploss some points below 11236. Safe traders can trade in options.

We can’t decide any confident trade in these conditions because there are multiple possibilities without any clear exact pattern but I had explained some low risk trading ideas for such conditions above. Traders can plan their own trade based on the conditions explained above.

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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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