Nifty Analysis and Trading Strategy for 20 Sep 2019

| September 20, 2019

Nifty opened almost flat at 10845 but declined sharply after opening and traded with negative bias for rest of the day. Nifty declined by more than 160 points to register low 10670 and closed 135 points down at 10704.

Yesterday, 10893 was immediate upside breakeven point. Nifty was expected to decline towards 10774-10707 without breaking higher above 10893.

Trading strategy was to buy 10900 Put of 19 Sep expiry using stoploss of 10907 expecting decline towards 10774-10707. Nifty registered high 10845 and declined till 10670. Further updates with fresh outlook and fresh levels were also sent during Live market Hours. 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 major 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.  Again, there is no major change in wave counts on this chart.

The bounce from 10004-12103 is confirmed as (abc) move because of overlapping of waves 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, we need to focus on pattern of decline after 12103 to calculate further probabilities.

After 12103, it seems wave (a or 1) completed from 12103-11625, wave (b or 2) completed from 11625-11981 as Double Zigzag Correction and wave (c or 3) may be in progress. Pattern of wave (a or 1) is not clear.

Within wave (c or 3), it seems inner wave (i) completed at 11461, (ii) completed at 11706 as Double Zigzag Correction, (iii) completed at 10782 , (iv) or (v) may be in progress.

Wave (v) achieved its minimum 38% projection after but pattern doesn’t seem completed and internal waves overlapped. So there is possibility for wave (iv) to turn into Irregular Correction or some sort of Complex Correction.

38% retracement of this whole decline after 12103 is placed at 10982-11197. So, 10982-11197 is major resistance and 11197 is major upside breakeven point. Any major upside reversal can be expected after close above 11197 only.

Let me explain the possibility of Irregular Correction or Complex Correction on separate lowest possible time frame.


Elliott Wave Counts of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering move after 10782 which I marked as start of wave (iv) on daily chart.

The bounce from 10782-11181 is Simple Zigzag (abc) move, the decline from 11181-10637 look like 3 waves (abc) move and later the bounce from 10637-11141 and decline from 11141-10746 is also (abc) move but the bounce from 10746-11084 and decline after 11084 seems Impulsive.

Overall the pattern on this chart is very complex and there are multiple possibilities, either wave (iv) completed at 11141 as Double Zigzag with Irregular (X) or wave (v) progressing as Ending Diagonal Triangle (ED) or there is some other pattern going on which I am not able to understand yet.

We should not make guesses about the pattern formed on this chart, there are multiple possibilities so we must wait for clear signs of exact pattern. We can concentrate on decline after 11084 till then to calculate immediate levels for our trading.

Now, let’s have a separate look at decline after 11084 to check its pattern.

Elliott Wave Counts of Nifty on 15 Minutes Chart

This is 15 minute time bar chart of Nifty covering decline from recent high 11084 which I am analyzing independently.

It seems wave (1) completed from 11084-10989, (2) may be completed from 10989-11052 and wave (3) may be completed from 11052-10796 wave (4) may be completed at 10885 and wave (5) may be in progress.

Wave (5) achieved 61% projection after breaking below 10707 and next 100% projection is placed at 10597 which is a rare case.

Within wave (5), it seems inner wave (i), (iii), (iii) is completed and (iv) may be in progress. 23%-38% retracement of whole wave (5) is placed at 10720-10752. So, 10720-10752 is immediate resistance and 10752 is immediate upside breakeven point.

We can expect one more decline of minimum 83-133 points [38%-61% projection for wave (v)] from the end of wave (iv) without breaking higher above 10752.

Conclusion

Overall, Nifty is still in medium term negative zone with possibility of further decline towards 10585-10004. 11181-11197 is major upside breakeven point range and we can think of any major upside reversal after break above 11197 point only.

For Intraday/short term, 10720-10752 is immediate resistance and 10752 is immediate upside breakeven point. We can expect one more decline of minimum 83-133 points [38%-61% projection for wave (v)] from the end of wave (iv) without breaking higher above 10752.

(83-133 points to be calculated from the end of wave (iv) after completion of wave (iv) somewhere below or near 10752)

We need to check pattern again if Nifty trades above 10752 for more than 15 minutes. Staying above 10752 can result in further bounce towards 10885. We need to keep all these conditions in mind while planning next trade.

Trading Points of View

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Overall, main trading strategy is “Selling on Rise” expecting further decline towards 10585-10440 whenever gets opportunity with small stoploss as long as Nifty is trading below major upside breakeven point 11197. We can think of any confident buying after close above 11197 only. Positional/Experienced/Hedge traders can make their own trading plan based on this condition.

For very short term/Intraday trade, 10720-10752 is low risk selling range and 10752 is Trend reversal point. Selling can be done if get Nifty in 10732-10752 range using exact stoploss of 10765.35 (some points above 10752) expecting decline of 83-133 points. Otherwise, Low risk selling range is 10720-10752 and exact stoploss is 10765, traders can plan their own trade based on this conditions.

We can think of any buying after break above 10752 only. Staying above 10752 can result in further bounce towards 10885 but confident trade can be decided after seeing the pattern of breakout only.

Further, I will update about the 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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