Further Update on Elliott Wave Outlook of Nifty on BREXIT

| June 23, 2016

This analysis report I am posting for further updates on my yesterday’s report Elliott Wave Outlook of Nifty on Important Event of BREXIT as Nifty is very nearer to the first targets and margin of difference between minimum and maximum range is very less. This report is also for my students and learners for their future reference to see the continuity in progress of Ending Diagonal Triangle pattern (ED).

Nifty opened almost flat at 8201 and consolidated within 8190-8210 range in first half but bounced sharply in second half by more than 90 points to register day’s high 8285 before closing 66 points up at 8270.

In Yesterday’s report, I expected a bounce above 8294 without breaking below 8074 and strategy was to Buy on Dips until Nifty achieve 8294 and avoid Selling. Nifty bounced till 8285 today which is very nearer to minimum target and selling levels. Let’s have a fresh look at latest charts.

Today I am showing move only after 24 May 2016 low 7715 as previous waves are not completely clear and possibilities I have explained in my previous analysis report Elliott Wave Analysis Report of Nifty for 26 May 2016.

Elliott Wave Counts of Nifty on 30 minutes chart

Elliott Wave Counts of Nifty on 30 minutes chart

This is 30 minutes time bar chart of Nifty covering move from 24 May low 7715 which looks like sharp impulsive wave.

May be inner wave (3) complete at 8294 as there is not even a 23% correction in between the whole move started from 7715-8294 as shown on chart. If wave (3) completed at 8294 then normal 23%-38% retracement for wave (4) is placed at 8157-8074 which is already achieved.

Now wave (4) also seems completed at 8063 which retraced slightly more than 38% as Simple zigzag and (5) may be in progress. Minimum 38%-61% projection for wave (5) is placed at 8284-8420 where 8284 is already achieved but wave (5) needs to complete above 8294 (top of wave 3).

So, Nifty can achieve minimum 8294 (top of wave 3) in coming session which can further extend to 8420. This possibility will be negated only if wave (4) turned into complex correction otherwise wave (4) has already completed an ‘abc’ cycle and achieved 38% retracement. This pattern is valid till Nifty is trading above 8063.

It seems 02 repeated Ending Diagonal Triangles in Nifty at top. First was from 8118-8294 as inner wave 5 of (v) of (3) and now second may be in progress as bigger wave (5).

So, we need to analyze bounce from 8063 which I am expecting as start of wave (5) progressing as Ending Diagonal Triangle (ED) to conclude further Nifty movement and to prepare next trading strategy.

Elliott Wave Counts of Nifty on 15 minutes chart

Elliott Wave Counts of Nifty on 15 minutes chart

This is 15 minute’s time bar chart of Nifty covering move for 13 Jun 2016 low 8063 which I am expecting as start of wave 5. Same as I explained in my last report, there are possibilities that wave (5) is progressing as Ending Diagonal Triangle with,

Wave (i) of ED completed from 8063-8213 as (abc), (ii) completed from 8213-8074 as Simple Zigzag, wave (iii) seems completed from 8074-8257 which projected exactly 123%, wave (iv) may be completed from 8257-8153 as simple zigzag and last wave (v) is in progress.

Wave (v) of ED already achieved its minimum Fibonacci projection 61% after breaking above 8272 but this ED needs to complete above 8294 because this ED is bigger wave (5) which needs to complete above end of wave (3), 8294.

But maximum limit of wave (v) of ED is the upper line joining wave (i) and (ii) which is around 8300 at present. So margin for completion of wave (v) of (5) is very less here. This ED needs to complete above 8294 but maximum limit at present is 8300, thus margin of 6 points only to take decision though the margin will rise with the time.

If this is really an Ending Diagonal and pattern I am identifying is right then Nifty needs to achieve 8294 once followed by a good decline without breaking above line joining wave (i) and (iii) of ED minimum till 8153 (start of last wave (v)) which may further extend till 8074-7900. If Nifty decline without breaking above 8294 then wave (iv) of ED may turn into Irregular Correction.

Please read the detailed explanation of Ending Diagonal Triangle pattern at Ending Diagonal Triangle (ED) Pattern of Elliott Wave Theory Explained by Deepak Kumar

Conclusion:

There is no change in the conclusion as there are possibilities for Ending Diagonal Triangle Pattern in progress from 8063. Nifty bounced as expected and is very nearer to minimum target 8294 but maximum upper range for this ED is coming around 8300 at present which is very nearer to minimum range.  The difference between minimum range and maximum range is only 6 points at present which will expand upwards as time progress.

So, trading strategy may be to exit longs near 8294 and risk can be taken to sell in 8294-8300 range with stoploss of 8325 expecting minimum target 8153 which further may extend to 8074.

There are further conditions to keep in mind: –

  1. Avoid selling if Nifty opens above 8310 (keep 10 points as margin of error) tomorrow and look at possibility of fresh pattern to initiate any trade as the whole pattern of ED I explained in this report will be negated. I am not able to identify any other possibility in this case as present.
  1. If Nifty decline without achieving 8294 then it may be still wave (iv) going as Irregular Correction and Nifty can again achieve 8153-8100 to complete wave (iv) followed by bounce above 8294.

So, any exact trading decision can be taken during market hours after opening today based on above mentioned conditions.

Effect and Outcome of BREXIT on Nifty

Subscribers and followers are asking about effect or outcome of BREXIT on Nifty. I apologize to say that I don’t have any idea about BREXIT and I don’t know what will the effects on Nifty because I don’t follow any news, events, data etc. Possibilities as per Elliott Wave Theory analysis I have explained above and any trading decision can be made according to these conditions.

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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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