Most Probable Elliott Wave Counts of Nifty as on 12 Oct 2015

| October 11, 2015

Last week Nifty broke above 8055 and negated the pattern which I was expecting previously. It also triggered our stoploss for shorts I mentioned in my previous analysis report Nifty can be sold in 7970-8021 Range for Minimum Target 7541 . And negation of previous pattern forced me to look at bigger picture again.

So, today I am having a fresh look at whole decline from all time high 9117 to see if I can conclude something from bigger picture. Counts before 9117 are same as I explained in my all time frame report of 7 Sept Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015.

Elliott Wave Counts of Nifty for 12 Oct 2015

Elliott Wave Counts of Nifty for 12 Oct 2015

This is daily time bar chart of Nifty covering move after all time high 9117. If I look at the waves on this chart then Move from 7997-8655 (marked within light grey box) looks like an “Irregular Correction”. So,

The first wave of correction may be from 9117-7997 rather than from 9117-7940 followed by “Irregular Correction” from 7997-8655 followed by 2nd wave of correction started from 8655. Here,

First wave of correction from 9117-7997 looks like “abc” rather than an Impulse. And 2nd wave of correction started from 8655-7541 also looks like three waves move till now. And 2nd wave of correction is just 5 points short of 100% of first wave.   So we can conclude:

  1. Either this correction already completed at 7541 as “Double Zigzag” as (abc-x-abc)
  2. Or this correction may turn into triple zigzag
  3. Or this is a normal ‘abc’ correction going on which I am not able to identify.

Still there are so many possibilities on this chart, so let’s move to 2nd leg of correction started from 8655 separately on hourly chart if we can conclude something.

Elliott wave counts of nifty for 12 Oct 2015

Elliott wave counts of nifty for 12 Oct 2015

This is hourly time bar chart of Nifty covering move after 18 July high 8655. As I shown on chart, the move from 8655 to 7541 is either ABC or 123. Previously I was expecting that this move is 123 where expected where 4 completed at 8055 and 5 can go below 7541 but Nifty broke above 8055 and negated my expected pattern. So, I need to have a fresh look at it. Let me explain the logic of “Reflex Point” first.

Reflex Point: Start of inner wave 5 of (c) is called Reflex Point.  The first impulse after completion of wave (c) often breaks reflex point but here Reflex Point is 8091 but first impulse didn’t cross it which further suggests 02 possibilities.

  1. Either, the correction is not completed and a low below 7541 is still possible
  2. Or even if the correction is completed at 7541 then also the move towards new high may not be straight or steeper. Inner wave 1 of upside may complete somewhere at higher followed by 61% correction to give opportunity for longs for new high.

Nifty should not break 8321 on upside if this bounce started from 7541 is wave (4) as wave 4 can never overlap wave 1 within complete impulse.

Here again, Waves pattern is not fully clear so we need to concentrate on smaller/inner waves pattern until we find any clarity.

So, let’s analyze bounce after 7541 on separate 30 minutes chart:

Elliott wave counts of nifty for 12 Oct 2015

Elliott wave counts of nifty for 12 Oct 2015

This is 30 minutes time bar chart of Nifty covering move after 08 Sept low 7541. There is no change in probable counts on this chart as I explained in my previous report, it is very difficult to counts wave in this chart because decline from 8055-7691 was impulse (5 wave’s move) and Nifty broke 8055 but a Correction can never be impulse. So, this impulse from 8055-7691 might be inner wave (c) of “Irregular Correction”. So, if I consider all the rules of EWT then most probably:

  1. An impulse may be completed from 7541-7879 which may be wave A or 1
  2. There may be “Irregular Correction” after impulse which completed at 7691 as shown on chart. This Irregular Correction may be wave B or 2. It is a big Irregular Correction which is rare.
  3. And there may be a start of next impulse from 7691 which may be wave C or 3. Wave C or 3 already achieved 100% and 123% projection after breaking 8028 and 8108 where as 161% projection is placed at 8237. This wave may not go above 8321 if it is C but there is no limit if it is wave 3.

Now, we need to step further and have a look at progress of wave (C or 3) started from 7691 separately on 15 minutes chart:

Elliott wave counts of nifty for 12 Oct 2015

Elliott wave counts of nifty for 12 Oct 2015

This is 15 minutes time bar chart of Nifty covering move after 7691 which I am expecting as start of wave C or 3. This wave started from with a sudden spike of 100 points after RBI cuts Repo rate by 50 followed by many Gap Ups.

It is again difficult to identify any convincing counts but there is identification of small upward impulse followed by ‘abc’ correction at top (from 8096). So, that wave started at top from 8096 either can be inner wave (iii) or (v). So, we must go with minimum and assume it as wave (iii).

If we assume it as wave (v) started from 8096 the Minimum Fibo projection for wave (v) is 38%-61% which is placed at 8282-8398. So, Nifty has possibility to rise till 8282 but should not break below 8096 as this wave is started from 8096.

Now, let’s have a look at move after 8096 on separate 5 minutes chart:

Elliott wave counts of nifty for 12 Oct 2015

Elliott wave counts of nifty for 12 Oct 2015

This is 5 minutes time bar chart of Nifty covering bounce 06 Oct’s low 8099 from where a small bullish pattern formed after identifying an upside Impulse followed by correction. It is same pattern  based on which I expected a decline from 8193-8202 range till 8135-8096 range and suggested to buy Nifty if decline below 8135 with stoploss of 8096 for 100%-161% rise of previous impulse.

Nifty moved as per our expectations and achieved our minimum targets of 8195-8250 but declined again from 8231 made a ‘abc’ type structure as whole.

Upside ‘abc’ structure is possible only as inner wave (i) of Ending Diagonal or in an “Irregular Correction” which is not wise to guess yet as we are not clear with previous waves.

So, we needs to wait to see if it forms an ED in next sessions or an “Irregular Correction” or some other pattern which  I am not able to identify yet.

The only thing we can conclude from this chart is that, Nifty should not break below 8096 if it is new wave started from 8096. Tomorrow’s move can clear exact pattern.

Conclusion:

There is no clear pattern for any positional view as I explained on charts using every time frame. I failed to identify a positional/medium term pattern after 3 months so it may take some to identify exact pattern and clarity.

Possibilities for both 7541 and new high are there but if Nifty is going for a new high then also upside may not be straight and it will give opportunity to buy.  So, there is no need to be in hurry for any positional longs. Concentrate on short term/intraday trades until we identify any confident positional pattern.

For short term also, Nifty closed with an upside “abc” like pattern at top that can be ED or Irregular Correction. We can only conclude that Nifty can bounce minimum till 8282 if it don’t break below 8096. There is no exact confident trade setup I can suggest here.

Concentrate on the short term pattern only which I will explain in my daily analysis report.

Tags: ,

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"