Nifty opened almost flat at 9736 and declined to register day’s low 9687 but bounced from lower levels by 100 points to register day’s high 9789 before closing 33 points up at 9768.
Yesterday, I explained that an Irregular correction is about to completed in 9695-9619 range after which there is a possibility of sharp bounce for new high above 10178.I suggested to exit all shorts and avoid fresh shorts until we get any confident bearish pattern and suggested to buying 10000 Oct call to hold till further updates. Nifty entered in 9695-9619 range and bounced back by 100 points. Let’s have a fresh look at latest charts for further scenario.
Today I am covering bounce from 6825 and earlier waves counts are explained in my latest all time frame analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frames as on 14 Aug 2017
This is daily time bar chart of Nifty covering bounce from 6825 which I am expecting as start of wave [v] on monthly chart (explained in All Time Frame report).
It seems inner wave 1 of [v] completed from 6825-8968, 2 completed at 7893 and wave 3 may be completed at 10137 or still in progress. Wave 3 of [v] achieved minimum 100% projection after registering 10036 and next 123% is placed at 10541.
Normal 23%-38% retracement of progress wave 3 is placed at 9607-9279. So, 9607-9279 is normal downward range if wave 3 completed at 10178. But the bounce is straight and sharp without any reasonable correction, we can’t calculate if wave 3 is completed or still in progress, this chart is just for general awareness.
And now, we need to analyze on pattern of decline after earlier high 10137.
This is hourly time bar chart of Nifty covering move after earlier high 10137.
The pattern of decline on chart looks like Irregular Correction with wave (A) from 10137-9685, wave (B) from 9685-10178 as Irregular and wave (C) is progress.
Normal 100%-123% projection for wave (C) in this case is placed at 9726-9619 and Nifty already entered in the range. We can expect a sharp bounce for new high above 10178 after completion of this impulse if I am right at identifying the pattern.
Let’s analyze the progress of wave (C) of expected Irregular Correction on separate lowest possible time frame chart.
This is 15 minutes time bar chart of Nifty covering decline from all time high 10178 which I am expecting as start of wave (C) of Irregular Correction.
It seems wave (1), (2), (3), (4) is already completed and (5) in progress from 9919. Wave (5) already achieved 61% projection after breaking below 9695 and is extended wave (5). If I am right at identifying the pattern then extended wave (5) needs to retrace 100% immediately.
Wave (5) started from 9919, so there must be sharp bounce towards 9919. Otherwise any delay or consolidation below 9919 may initiate further fall.
As I explained in yesterday’s report, there is a possibility of completion of a big Irregular Correction in 9695-9619 range followed by sharp bounce for new high above 10178 again. But if correction is already completed at 9687 then there must be sharp bounce till 9919 first otherwise we can expect one more low below 9687.
Trading Point of View:
Same as I suggested yesterday, A big correction is about to complete in 9695-9619 range or is already completed and there is possibility of sharp bounce for new high above 10178 again after completion of this correction. So, all shorts must be exited and avoid any fresh shorts until we get any confident bearish pattern.
10000 Oct Call taken today at lower levels can be hold till further update. Further decision will be taken after seeing the nature of tomorrow’s move. Any short term/Intraday trade can be decided later after seeing inner waves of reversal pattern.