Nifty Analysis and Trading Strategy for 07 Mar 2018 Onward

| March 7, 2018

Nifty opened higher at 10420 and bounced further to register day’s high 10441 but failed to sustain at higher levels decline by more than 220 points from day’s high to register low 10215 and closed 109 points down at 10249.

Yesterday, Nifty was in short term negative zone with 10403 as breakeven point and a good move was expected either above 10637 or below 10267 very soon. Hedge trade was suggested if get Nifty near 10450 by buying 10300 Put and 10600 Call in equal quantity. Nifty traded near 10450 (in 10430-10441 range) and suggested hedge trade is giving 60-70 points profit. Let’s have a fresh look at latest charts for further scenario.

This analysis report is covering bounce from low 6825 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 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 from 6825 which I am expecting as start of wave {[v] of [3] of (iii)} of larger (3) on monthly chart. This is the same chart with explanation which I had explained in my last analysis report because there is no major change in wave counts on this chart.

It seems inner wave 1 of [v] completed from 6825-8968, 2 completed at 7893 and wave 3 may be in progress.

And within wave 3 started from 7893, there is small but identifiable correction from 10137-9687, so 10137 can be inner wave (iii) of 3 followed by (abc) correction from 10137-9687. But the later bounce from 9687-11171 is also 3 waves move followed by sharp decline. So, there are 02 possibilities: –

  1. Either wave (iv) of 3 completed at 9687 and wave (v) in progress
  2. Or wave (iv) is still in progress as Irregular Correction with wave (A) completed from 10137-9687, Irregular (B) completed from 9687-11171 and wave (C) in progress from 11171.

This chart is showing two possibilities, so need concentrate on decline from 11171 to calculate further move until we get clarity on daily chart.

Elliott wave analysis of nifty on horly chart

Elliott wave analysis of nifty on horly chart

This is hourly time bar chart of Nifty covering decline from all time high 11171 which is the start of downward impulse.

There is slight change in wave counts as Nifty broke earlier low and may be 2nd possibility is in work. Now, it seems wave (1) completed at 10979, (2) completed at 11117, (3) completed at 10276, (4) completed at 10637 and wave (5) may be in progress.

Minimum 38%-61% projection for wave (5) is placed at 10295-10083 whereas Nifty achieved 10215 till now. Wave (5) already achieved its minimum Fibonacci projection, now we need to analyze the pattern of wave (5) on separate chart.

Elliott wave analysis of nifty on 30 minute chart

Elliott wave analysis of nifty on 30 minute chart

This is 30 minute time bar chart of Nifty covering bounce from 10276 which I had marked as Start of wave (5).

This decline after 10637 has overlapping with repeated (abc) pattern, so there is possibility of Ending Diagonal Pattern for wave (5).

The first (abc) decline from 10637-10302 can be inner wave (i) of Ending Diagonal, next (abc) bounce from 10302-10631 can be wave (ii) of ED and wave (iii) may be in progress from 10631.

The pattern of wave (iii) is not identifiable but wave (iii) of ED cannot project more than 161%. So, this decline started from 10631 must complete as (abc) wave and should not break below 10088 to qualify as wave (iii) of ED.

I am not able to find any other pattern for wave (5) and we need to wait for wave (iii) or (iv) to complete for conforming it as Ending Diagonal Triangle.

Let’s have a look at the progress of expected wave (iii) of ED started from 10631 on separate chart.

Elliott wave analysis of nifty on 15 minute chart

Elliott wave analysis of nifty on 15 minute chart

This is 15 minute time bar chart of Nifty covering decline from 10631 which I am expecting as start of wave (iii) of ED.

May be wave (a or 1) completed from 10631-10461 (pattern is not clear), wave (b or 2) may be completed from 10461-10535 as Simple zigzag and wave (c or 3) may be in progress.

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

Within wave (v), it seems inner wave 1, 2 already completed and 3 may be in progress. 38% retracement of the progress of wave (v) is placed at 10301. So, 10301 is the immediate breakeven point above which we can expect any short term reversal.

Conclusion

Nifty is forming a very complex type of pattern at bottom and there is possibility of Ending Diagonal Pattern at the bottom started from 10637. So, we can expect some confusing and unexpected moves in coming days if it is really Ending Diagonal Triangle in progress. Ending Triangle Pattern can be confirmed only after completion of its inner wave (iv) of (v).

But wave started from 10631 must complete above 10088 to quality as wave (iii) of ED, so 10088 can be assumed immediate support for time being.

For very short term, Nifty is still in very short term negative zone and 10301 is the breakeven point on upside above which further bounce towards 10440-10535 can be expected and same 10301 can be used as stoploss for shorts.

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

Trading Points of View:

Nifty gave a good move from around 10450 for 10276 and below and hedge trade taken near 10450 by buying 10300 put and 10600 call in equal quantity is giving profit of about 60-70 points. 10600 put declined from 59 to 26 and 10300 put bounced from 83 to 189.

Now, 10300 put can be booked to lock the profit and 10600 call can be hold till further update. Those who don’t want to risk 20-26 points can close the call also.

For fresh trade, 10088-10083 is immediate support on downside. So, any decline towards 10120-10088 in coming days can be used to buy 10300 call using stoploss of 10069 expecting 10300-10440 as minimum upside targets.

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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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