Nifty Analysis and Trading Stratgies for 18 Feb 2019 Onward

| February 17, 2019

Nifty opened higher at 10780, registered high 10785 and declined by more than 160 points to register day’s low 10620 but bounced back again by 120 points and close 21 points down at 10724.

Friday, Nifty was in short/Medium term negative zone with 10795 as upside breakeven point, 10956-11032 as strong resistance and 10659 as immediate support.

Trading strategy was “Sell on Rise” whenever gets opportunity for target 10534-10333 in coming days but intraday buying was advised near 10659 using exact stoploss 10643 expecting 150-240 points bounce. Nifty declined by 160 points without breaking above upside breakeven 10795 and bounce of 120 points also happened from low but stoploss for buying was triggered, nifty bounce after registering low 10620. 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 analysis 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 [V] 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 ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress.

Point of Cautions: – The reversal after completion of Irregular Correction is known to be sharp but the bounce after 10004 is slower when compared to the speed of wave (c) of Irregular Correction. So, we need to be cautious for one more low below 10004.

Now, let’s analyse the bounce started from 10004 separately to calculate internal moves.

Elliott wave analysis of NIfty on 5 hourly chart

This is 5 hourly time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart. There is no change in wave counts.

From high 10985, the downside Impulse completed from 10985-10534 can be marked as wave (A). Irregular wave (B) may be completed from 10534-11118 with inner wave [a] from 10534-10923, [b] may be completed at 10923-10583, [c] from 10583-11118 and wave (C) may be in progress from 11118.

Wave (C) started from 11118 must be Impulse. Normal 100%-123% projection for wave (C) is placed at 10667-10560 and Nifty already entered in this range, so wave (C) already achieved minimum projections.

Normally, wave (C) of Irregular correction completed near the after the end of wave (A). End of wave (A) is 10534, so we can expect wave (C) to complete near 10534 or below.

If we assume the bounce from 10004-10985 as impulse then its inner wave (v) is extended and start of extended wave (v) is 10333. Extended wave (v) often retraces 100%, so we can expect fall towards 10333.

After combining all the conditions and personality of move on this chart, wave (C) achieved its minimum projection but other conditions are indicating the possibility of fall towards 10534-10333.

So, our next step is to analyze the progress of wave (C) separately on lowest time frame chart to check if an Impulse pattern is completed or not.

Elliott wave analysis of NIfty on 15 minutes chart

This is 15 minutes time bar chart of Nifty covering decline after 11118 which I marked as start of wave (C) of Irregular Correction on 5 hourly charts.

Again I have to change the counts because of abnormal projections within previous wave counts [wave (v) of previous counts projected more than 100%]. I am again trying to mark most probable wave counts which satisfy Fibonacci retracements and projections.

The decline from 11118-10620 is almost straight without even 38% correction in between. So, I can assume that wave (iii) is completed at 10620 or (iii) is still in progress because we are not seeing any sign of wave (iv) [38% retracement] within this decline yet. I tried to mark internal wave counts but there is lack of confidence in inner wave counts.

If wave (iii) is completed at 10620 then 23%-38% retracement of this whole move till wave (iii) is placed at 10737-10810. So, 10737-10810 is immediate resistance and 10810 is immediate upside breakeven point. We can think of any upside reversal after break above 10810 only.

Now, let’s have a separate look at the bounce after 10620 to calculate internal levels.

Elliott wave analysis of NIfty on 5 minute chart

This is 5 minutes time bar chart of Nifty covering bounce after 10620.

The bounce seems impulsive with inner wave (1), (2), (3), (4) completed and (5) may be in progress. Wave (5) achieved 61% projection after 10743, thus wave (5) is extended.

Next 100% projection for wave (5) is placed at 10787 which is a rare case and same is immediate resistance. Nifty can give 70-100 points decline before breaking above 10787 or we can expected a minimum decline towards 10674 (start of extended wave (5)).

Conclusion

For Medium/Long Term: – Same as I explained yesterday, most of the conditions are favouring formation of Irregular Correction on top and indicating sharp fall towards 10534-10333 in coming days and Nifty already registered low 10620. But trading must be done based on internal patterns only.

For short term: – Nifty is still in negative zone. 10810 is upside breakeven points and any upside reversal can be expected after break above 10810. Same 10810 can be used as stoploss for any positional shorts.

10787 is immediate resistance and Nifty can give 70-100 points decline (may be towards 10674) before breaking above 10787.

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

Trading Points of View:

Short/medium trading strategy must be “Selling on Rise” whenever getting opportunity expecting decline towards 10534-10333 in coming days. 10831 (20 points above 10810) can be used as stoploss for any positional shorts.

For Intraday, any bounce towards 10670-10787 can be used to sell Nifty using exact stoploss of 10793 (some points above 10787) expecting decline of 70-100 points.

These are low risk trading strategies I can suggest in such conditions, otherwise traders can plan their own trades based on the conditions explained above.

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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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