Nifty can Bounce Above 10490 without Breaking Below 10269

| November 24, 2017

Nifty opened higher at 10358 and bounced further to register day’s high 10378 but declined sharply by more than 60 points to register day’s low 10307. Nifty bounced again from lower levels and closed 6 points up at 10348.

Yesterday, one more bounce towards 10490-10590 was expected in coming days and 10297-10263 was estimated breakeven/support range on downside. I suggested initiating positional longs if Nifty decline around 10297-10263 using exact stoploss of 10257 (some points below 10263) expecting targets 10490-10590 in comings days/weeks.

Nifty declined till 10307 and bounced back to close at 10348. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 28 Sep 2017 low 9687 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 16 Oct 2017 Onward

Nifty Elliott wave analysis on hourly chart

Nifty Elliott wave analysis on hourly chart

This is hourly time bar chart of Nifty covering bounce from low 9687 which I marked as start of new upside impulse. This is the same chart with explanation which I had explained in my last analysis report because there is no major change in wave counts on this chart.

Generally, it seems wave (1) completed from 9786-9945, (2) completed from 9945-9881, wave (3) may be in completed from 9881-10490, wave (4) may completed at 10094 and wave (5) may be in progress.

Minimum 38%-61% projection for wave (5) is placed at 10400-10590 but end of wave (3) is 10490. So, 10490-10590 is minimum targets range for wave (5).

But wave (4) retraced 100 points deeper than 38%, so there are cautions. So, first we need to wait for target of 10344 and further outlook will be calculated later. 10344 is already achieved on Friday.

Now, let’s have a deeper look at the pattern of wave (4) started from 10490-10094 on separate 15 minutes chart.

Nifty Elliott wave analysis on 15 minute chart

Nifty Elliott wave analysis on 15 minute chart

This is 15 minute time bar chart of Nifty covering decline from all time high 10490 which I am expecting as start of wave (4) on hourly chart. This is again the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

It seems wave (A) completed from 10490-10266, (B) completed from 10266-10344 and wave (C) completed from 10344-10094. Wave (C) achieved normal 100%-123% projection and pattern also seems completed. So, pattern is indicating that wave (4) is completed from 10490-10094 as Simple Zigzag Correction.

But if by chance, I am wrong at identifying the pattern and wave (4) is not completed then 61% retracement of whole decline (from 10490-10094) is placed at 10338 which is already achieved.

Now, we need to analyze the progress of expected wave (5) started from 10094 on 5 minute chart for deeper analysis.

Nifty Elliott wave analysis on 15 minute chart

Nifty Elliott wave analysis on 15 minute chart

This is again 15 minute chart covering bounce from 10094 which I am expecting as start of wave (5).

There is no major change in wave counts, it seems wave (1) completed at 10211, wave (2) completed at 10184 and wave (3) may be completed at 10368, (4) may be completed at 10307 and wave (5) may be in progress.  Wave (4) looks like an Irregular Correction.

Minimum 38%-61% projection for wave (5) is placed at 10411-10476 which is the minimum target range for wave (5) if I am right at identifying the pattern.

38% retracement of wave (3) is placed at 10297 which is the immediate breakeven point on downside. And 38% retracement of whole bounce (from 10094-10378) is placed at 10269. So, 10297-10269 is strong reversal range on downside.

Conclusion

There is no change in wave counts, pattern started from 9687 is indicating bounce for 10490-10590 in coming day’s/weeks and inner waves are also indicating Nifty in bullish trend as long as trading above 10269-10297 range. 10297 is immediate breakeven point on downside below which we can think of any reversal.

So overall, both short term and medium term trend is bullish as long as 10269-10297 is safe but we can expect volatile and sideways moves in between because wave (4) and (5) is pending.

Trading Point of View:

For Short to Medium Term, trading strategy must be “Buying on Dips” as long as Nifty is trading above 10269 and until 10490 is achieved.

If someone initiated positional longs on yesterday’s decline around 10307 then same can be hold with stoploss of 10259 expecting minimum target 10411 which further can extend towards 10490-10590 in coming days.

If Nifty decline again near 10297-10269 then fresh longs can also be initiated with same stoploss for same targets. Overall trading strategy must be “Buying on Dips” kipping 10490 as minimum upside target and 10259 (some points below 10269) as stoploss.

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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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