Nifty can be Bought in 9608-9568 Range for New High Above 9709

| June 12, 2017

Nifty opened mild lower at 9638 and declined further to register day’s low 9608 but bounced again from lower levels to register day’s high 9676 before closing 21 points up at 9668.

Friday, a corrective decline towards 9622-9658 was expected and trading strategy was to hold Nifty shorts taken in 9679-9709 using fresh stoploss of 9689 expecting same target 9622-9568. Nifty declined further to achieve minimum target 9622, registered low 9608 but bounced again towards 9676. Let’s have a fresh look at latest charts for further scenario.

Today I am analyzing bounce from 24 May 2017 low 9341 this analysis report is further update on my previous analysis report Nifty can be Sold in 9679-9709 Range with Stoploss of 9710

Elliott Wave counts of Nifty for 12 Jun 2017

Elliott Wave counts of Nifty for 12 Jun 2017

This is 30 minute time bar chart of Nifty covering bounce from 9341 which I am expecting as start of new impulse.

It seems wave (1), (2), (3) completed till 9709 and wave (4) may be in progress. 23%-38% retracement of this whole move is placed at 9622-9568 whereas 9622 is already achieved. 38% retracement 9568 can be referred as reversal point or stoploss for longs.

Change in wave counts:  Earlier I marked end of wave (5) at 9709 but the decline from 9709 seems corrective and slow, so may it is just wave (3) completed at 9709 and wave (5) is still pending.

So, we need to analyze decline from 9709 separately for more depth and clarity.

Example of Triple Zigzag Correction

Example of Triple Zigzag Correction

This is 15 minutes time bar chart of Nifty covering decline from all time high 9709.

There is repeated overlapping of waves within the decline from 9709 and the whole pattern looks like a progress of Complex Correction, most probably Triple Zigzag Correction.

May be the decline is progressing as Triple Zigzag Correction (abc-X1-abc-x2-abc) where (abc-X1-abc-X2) is already completed and last (abc) cycle may be pending which needs to complete below 9608.

So, if this decline is really progressing as Triple Zigzag Correction then Nifty needs to completed correction between 9608 and lower line of Pattern followed by sharp bounce for new high. And possibility of Triple Zigzag Correction will be negated if Nifty even touches 9689.

But if this correction is already completed at 9608 as Double Zigzag then Nifty can bounce straight above 9709.

Rare Possibility of Crash like Sharp Decline: There is a very rare possibility of crash like sharp decline and I am explaining the same on chart with possibility of pattern.

Possibility of crash like decline in Nifty

Possibility of crash like decline in Nifty

This is again 15 minutes time bar chart of Nifty covering decline from all time high 9709.

Nifty can decline sharply like crash only if it is wave (1) and (2) completed till 9688 followed by inner waves (i) and (ii) of (3) completed till 9676 because there will be sharp and fast wave (iii) of (3) after that. And both wave (iii) and (3) known to be faster, steeper and with gaps.

But this possibility is a rare case because decline from 9709-9643 and from 9688-9608 looks like (abc) rather than impulsive. I just explained the possibility for learners here otherwise it is a very rare case.

Conclusion:

We expected a small or big correction from 9709. Small correction we expected till 9622-9568 range and bigger correction only if breaks below 9568. Nifty decline till expected 9622-9568 range but now it seems just a small correction because the declines from 9709 looks like a progress of Complex Correction which is already near to completion. So there are 02 conditions on chart: –

  1. Either Nifty can complete Triple Zigzag correction between 9608 and lower line of Pattern followed by sharp bounce for new high. But the possibility of Triple Zigzag Correction will be negated if Nifty even touches 9689.
  1. Or Nifty can bounce straight above 9709 if the correction is already completed at 9608 as Double Zigzag.

So, a bounce above 9709 for new high is expected in both the cases and 9658 is the breakeven or reversal point for downside. So, we need to keep all these conditions in mind while preparing our next trade.

Trading Point of View:

According to most probable conditions: –

  1. Nifty can be sold using exact stoploss of 9689 expecting minimum target 9608 which further can extend towards 9568. Initiate the trade only getting price near stoploss or getting good risk reward and protect profit once break below 9608.
  1. Nifty if decline below 9608 then longs can be initiated between 9608-9568 using stoploss of 9663 (some points below 9568) expecting minimum target 9709 which further can extended higher. Exact targets on upside can be calculate later after confirmation of completion of correction. Safe traders can use June 9400 Call instead of Nifty Futures because there is also a rare possibility to crash like decline.
  1. Nifty if break straightway above 9688 then it can bounce further above 9709 but I can’t suggest any trade for this condition because Risk Reward is not good in this case.

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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"