This Elliott Wave Analysis report of Nifty for 31 July 2018 is further updates on my last analysis report Nifty can Decline by 83-133 Points Before Breaking Higher above 11335 because there is slight change in wave counts on pattern.

Nifty opened higher at 11296, declined to register day’s low 11261 but bounced back and traded with strength for rest of the day. Nifty bounced by more than 60 points from day’s low to register day’s high 11328 and closed 41 points up at 11319.

Yesterday, Nifty was in positive zone with 11200-11150 as support range and 11150 as breakeven point but one decline towards support range was expected before breaking much higher above 11335.

Selling was suggested on bounce towards 11320-11335 range with exact stoploss of 11343 expecting 80-130 points decline OR intraday selling was suggested if Nifty trades below opening price at 9:31 AM using stoploss of 27 points and trade was suggested to manage with trailing stoploss.

Nifty was trading just below opening price at 9:31 AM and decline by 40 points after that but bounced back again to register high 11328. Now, let’s 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 count of Nifty on daily chart

Elliott Wave count 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. This is the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

It seems inner wave (1) completed from 9951-10229, wave (2) completed from 10229-10111 as Irregular Correction, wave (3) may be completed at 10929, wave (4) may be completed at 10417 as Simple Zigzag and wave (5) may be in progress. [Wave (4) retraced deeper than 38%).

Wave (5) already achieved 61% projection after breaking above 11022 and next 100% projection is placed at 11395 which may or may not be achieved, so we need to concentrate on its pattern now onward.

So, let’s analyze the progress of expected wave (5) started from 10417 on lowest possible time frame chart to check its pattern closely.

Elliott Wave count of Nifty on 5 hourly chart

Elliott Wave count of Nifty on 5 hourly chart

This is 5 hourly time bar chart of Nifty covering bounce from 10417 which I have marked as start of wave (5) on daily chart. There is slight change in wave counts because possibility of Ending Diagonal Triangle is negated today after break above 11327.

Now, it seems inner wave [1] of (5) completed from 10417-10893 (pattern not clear), [2] completed at 10557 as Double Zigzag correction and wave [3] may be in progress. Wave [3] already achieved 161% projection.

Within wave [3], it seems inner wave [i], [ii], [iii], [iv] is completed and [v] may be in progress from 10925. Wave [v] of [3] achieved normal 61% projection after break above 11246 and next 100% projection is placed at 10446 which may or may not be achieved.

Now, let’s have a close look at progress of wave [v] of [3] on separate chart to check its pattern.

Elliott Wave count of Nifty on 15 Minute chart

Elliott Wave count of Nifty on 15 Minute chart

This is 15 minute time bar chart of Nifty covering bounce from 10925 which I marked as start of wave [v] of [3] on 5 hourly chart.

Inner wave (1) of [3] may be completed from 10925-11076 (pattern is not clear), wave (2) may be completed from 11076-10935 and wave (3) may be in progress from 10935.

Within wave (3), it seems inner wave (i) completed from 10935-11054, (ii) may be completed from 11054-11023, wave (iii) may be completed from 11023-11157, wave (iv) may be completed from 11157-11113 and wave (v) may be in progress.

Wave (v) of (3) already achieved minimum 61% projection after break above 11250 and next 100% projection is placed at 11335 which may or may not be achieved. Nifty achieved 11328 till now. Wave (v) projecting higher than 100% is a rare case.

23%-38% retracement of progress of whole wave (3) is placed at 11235-1177. So, 11235-11177 is short term support range whereas 11177 is breakeven point and same can be used for stoploss for longs. Nifty if breaks and stay below 11150 for 15 minutes can result in further decline towards 11078-10925.

Let’s have a close look at progress of wave (v) of (3) on lowest possible time frame: –

Elliott Wave count of Nifty on 5 minutes chart

Elliott Wave count of Nifty on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering bounce after 11113 which I marked as start of wave (v) of (3) on 15 minutes chart.

It seems inner wave 1, 2, 3, 4 is completed and 5 of (v) may be in progress from 10261. Minimum 38%-61% projection for wave 5 is placed at 11335-11380.

The pattern of wave (v) started from 11113 is indicating bounce above 11335 where as this wave is already highly extended and will project more than 100% after break above 11335.

Conclusion

For long/medium term,

Same as I explained in my all time frames report, Outlook for medium/long term is still bullish because Nifty is within the middle of wave (3) on largest wave cycle and there is Irregular Correction at top. Nifty has long way to go with occasional corrections (maximum 23%-38% corrections with 9918 as breakeven point and 8968 as pattern negation point). Nifty may not break below 8968 in any case in coming years before competition of larger wave cycle.  We need to revise whole wave counts if Nifty ever broke below 8968.

For Short Term,

Nifty is still in positive zone with 11235-11177 as short term support and 11177 as breakeven point on downside. Generally, 11327-11335 is mild resistance on upside and most of the waves are already highly extended, so there is possibility of correction towards support range soon.

And Nifty if decline towards support range 11235-11177 with corrective pattern then one more bounce towards new life time can be expected.

Any reversal can be expected after breaking below 11177 only. Nifty if breaks and trade below 11177 for 15 minutes then further decline towards 11078-10925 can be expected.

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

Trading Points of View:

According to fresh conditions on charts: –

Generally, Nifty needs to give a correction towards support range 11235-11177 soon but highly extended waves are not giving confidence to sell. On the other hand, it is wave (3) of [3] I progress and it is not safe to guess the top of wave (3).

So, if someone sold Nifty today in 11320-11335 range and still holding then use 11343 as strict stoploss for the trade and hold for next day only if Nifty closes near low of the day. Exit the trade if stoploss triggers and wait for next opportunity.

Although, waves are already highly extended and there is possibility of correction towards support range but we must wait for correction towards support range to initiate further trade because we already had 2-3 wrong trades while trying to catch the top.

Our trades were not wrong actually, Nifty gave some decline from every of our selling range and every trade was giving profit of more than stoploss, but corrections were shallower than normal and Nifty bounced back without achieving minimum targets.

These are most probable low risk trading conditions I can suggest in these conditions, otherwise traders can plan their own trade based on the conditions explained above.

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