Nifty can be Sold with 8393 Spot as Stoploss – Elliott Analysis dated 06 Nov 2014

| November 6, 2014

After sharp rise of 600 points in 10 sessions Nifty is consolidating in 80 points range from last 3 sessions with volatility. Nifty is showing new high everyday but with overlapping of waves which warns that a correction is near. In 03 Nov 2014 analysis report I expected that “Nifty May Start Correction From 8359-8418 Range” and present set up on charts is justifying it now.

Let us see what charts are suggesting:

Nifty Elliott Wave Analysis by Deepak Kumar

Nifty Elliott Wave Analysis by Deepak Kumar

This is 15 minutes time bar chart of Nifty showing move after 7986 which is a start of new impulse. You need to see my previous analysis report posted on 03 Nov 2014 to know which impulsive it is on bigger time frame.

Wave 5 of this impulse is highly extended and projected 123% till now and 138% placed at 8389. We can also identify overlapping of waves within wave (v) of (5) that looks like a Diagonal Triangle.

This formation suggests that the shorts term top is already made or is very near. We need to look wave (v) of (5) closely for further clarification.

Nifty Elliott Wave Analysis by Deepak Kumar

Nifty Elliott Wave Analysis by Deepak Kumar

This is 5 minutes time bar chart of Nifty showing move after 8267 which is the start of wave (v) of (5) on previous chart.  Progress of move after end of wave (v) seems as:

Wave (1) looks like 3 waves (abc) move

Wave (2) looks like complex/combination correction

Wave (3) again looks like 3 wave (abc) move

Wave (4) looks like simple zigzag (abc) correction

All these waves formation signaling the possibilities of Ending Diagonal (3-3-3-3-3) for wave (v).

If it is Ending Diagonal and wave (4) of ED is completed then a good correction is very near. Wave (5) of ED is either completed at high 8364 as we can see 3 waves after completion of wave (4) and down move after touching the high of 8364 also disturbed the lower line of Triangle.

Now, Wave (5) of Ending Diagonal is either completed or has scope to rise till upper line of Triangle. Upper line of Triangle is at around 8375 now. Wave 3 is shorter than wave 1 here and forming Contracting Triangle, Thus wave (5) is expected shorter than wave (3). Wave (3) was 66 points and we add 66 at the end of wave 4 (8324) the level comes 8390 thus wave 5 should not rise above 8390.

And Nifty already disturbed the lower line of triangle; breaking below this line again may confirm the completion of ED and start of next correction.

Conclusion:

By analyzing all conditions, a correction seems very near and maximum upside seems till 8390. So, low risk position can be taken by selling Nifty with 8393 spot as stoploss for 100 plus points correction. Trade must be light and with strict stoploss.

Ebbok Cover - Copy (3)

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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"

Comments (3)

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  1. suresh says:

    Thanks for responding Deepak

  2. suresh says:

    After a healthy intraday correction nifty managed to close
    at the channel bottom, does that mean channel top will be tested?

    • Deepak Kumar says:

      Dear Suresh,

      First, it is very difficult to identify corrections.
      Second, Nifty not yet correct minimum 23% of last impulsive started from 7986.
      Third, the up move after Intraday low doesn’t carrying the personality of Impulsive upside.

      So, it is difficult to expect the next move. I personally sold Nifty Intraday and booked half in 50 points profit and holding rest with high as stoploss because I am not confirmed of the next move. Need to wait till I identify a clear pattern again.