How Much Nifty Can Decline During This Fall – Elliott Wave Analysis

| August 2, 2019

Nifty opened lower at 11060, registered high 11076 but declined by 200 points to register day’s low 10876. Nifty bounced back again by 120 points and finally closed 138 points down at 10980.

Yesterday, overall Nifty was in negative zone and has possibility to decline towards 10585-10004 in coming days. Whereas 11119-11126 was intraday resistance and intraday decline towards 11062-10999 was expected.

Trading strategy was to hold shorts or Sell in 11119-11126 range using exact stoploss of 11143 expecting decline towards 11062-10999. 11062 was achieved at opening only and 11074 was fresh upside breakeven later and same was updated by Live Update. Nifty declined further towards 10876 and closed at 10980. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 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 Counts of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [5] on daily chart in my last “All Time Frames” Report. There is no change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave [iii] of [5] is completed at 11171 and [iv] may be completed at  Irregular Correction at 10004 and wave [v] may be in progress. Wave [v] achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave [v] achieved 12103 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.

Elliott Wave Counts of Nifty on Daily Chart

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave [v] of [5] on daily chart.  

The bounce from 10004-12103 is confirmed as (abc) move because of overlapping today. Waves are overlapped after break below 10985. Now we have 02 possibilities on this chart.

  1. The (abc) bounce from 10004-12103 is inner wave [1] of Ending Diagonal Triangle for wave [v]. If this is the case then Nifty can decline towards 10585 to complete wave [2] of ED and later Nifty can bounce slowly with volatility for new high to complete wave [3], [4] and [5] of ED. Possibility of ED will get negated if Nifty breaks below 10004 (end of wave [1]).
  • The (abc) wave completed from 10004-12013 is wave (B) of Irregular Correction. If this is the case then Nifty can decline towards 10004 to complete wave (C) of Irregular Correction followed by new quick Bullish Rally for new high.

Now, 11071-11193 is immediate resistance and 11193 is upside trend reversal point. Nifty had possibility to decline towards 10585-10004 as long as trading below 11193. We can think of any upside reversal after break above 11193 only. Reason for this resistance 11071-11193 is explained on next chart.

Elliott Wave Counts of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering bounce after all time high 12103 which I marked as start of wave (4) on daily chart.

This decline looks like Double Zigzag with first (abc) cycle completed from 12103-11625, wave (X) may be completed from 11625-11981 and 2nd (abc) cycle may be in progress from 11981.

2nd (abc) cycle started from 11981 is bigger and sharper than previous waves, so I am taking alternate counts here. It seems wave (a or 1) completed from 11981-11461, wave (b or 2) may be completed from 11461-11706 and wave (c or 3) may be completed at 10876 or still in progress.

Within wave (c or 3), it seems inner wave (i), (ii), (iii), (iv) is completed and (v) may be in progress. Wave (v) already projected more than 100% after breaking below 10995.

23%-38% retracement of progress of wave (c or 3) is placed at 11071-11193. So, 11071-11193 is major resistance and 11193 is major upside breakeven point. Nifty if breaks and stay above 11193 can result in further bounce towards 11706-11981 otherwise further decline towards 10585-10004 can be expected.

Now, let’s have a separate look at bounce after today’s low 10876.

Elliott Wave Counts of Nifty on 1 minute Chart

This is 1 minute time bar chart of Nifty covering bounce after today’s low 10876. I am seeing this move on 1 minutes chart because it is impossible to identify its inner waves on 5 minutes chart.

It seems wave (1), (2), (3) is completed and (4) or (5) may be in progress. 23%-38% retracement of this whole bounce is placed at 10974-10955. So, 10974-10955 is immediate support and 10955 is immediate downside breakeven point.

Nifty if breaks and stay below 10955 for 15 minutes can result in further decline towards 10876, otherwise one more bounce of 45-70 points can be expected.

Conclusion

Overall, major trend reversal point 11523 is broken and Nifty is in medium term negative with possibility of further decline towards 10585-10004. 11071-11193 is major resistance and 11193 is major upside breakeven point. Nifty if breaks and stay above 11193 can result in further bounce towards 11706-11981 otherwise Nifty is going to decline further towards 10585-10004.

For Intraday/short term, 10974-10955 is immediate support and 10955 is immediate downside breakeven point. Nifty if breaks and stay below 10958 for 15 minutes can result in further decline towards 10876, otherwise one more bounce of 45-70 points can be expected.

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

Trading Points of View:

Nifty broke major trend reversal point 11523 and entered in medium term negative zone and there is possibility for further decline towards 10585-10004 with 11165-11269 is major resistance. So short term trading strategy must be “Selling on Rise” whenever getting opportunity with small stoploss.

For Intraday, trading strategy is to sell Nifty if trades below 10955 for more than 15 minutes. 11955-10974 will be low risk selling range after Nifty trading below 10958 for 15 minutes and 10876 will be minimum downside target. 10988 (33 points above 10958) can be used as stoploss for shorts.

Furthermore, focus must be on “Selling on Rise” and be strict to Intraday trades as long as Nifty is trading below 11193 because volatility is expected to increase as we are already witnessing. Patterns may complete/change in quick time, so levels may change frequently. We need to observe patterns regularly for changes in levels.

Further, I will update about formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast to all my “Nifty Live Updates” subscribers.

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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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