Nifty can Bounce Sharply towards 10759-10829 Very Soon

| February 15, 2018

Nifty opened higher at 10537, registered low 10518 and bounced sharply to register day’s high 10618 but failed to sustain at higher levels and declined back to register day’s low 10511 and finally closed 44 points up at 10545.

Yesterday, personality of the bounce from low was not suggesting any bigger reversal for new high and possibility of one more low below 10276 was still there in coming days from present levels or from 10637-10829.

For short term, 10498 was breakeven point and minimum bounce till 10590 was expected which further can extend towards 10637-10829. Buying was suggested with stoploss of 10477 (some points below 10498) expecting minimum target 10590 which further can extend towards 10637-10829. Nifty registered high 10618 without breaking below breakeven point. Now, let’s have a fresh look at latest charts for further scenario.

This analysis is covering bounce from low 9687 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 2018 

Elliott Wave analysis of Nifty on 5 hour chart

Elliott Wave analysis of Nifty on 5 hour chart

This is 5 hour time bar chart of Nifty covering bounce from low 9687 which I marked as start of wave (v) of 3 on Daily Chart. This is 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 the impulse completed from 10033-11171 with very highly extended inner wave [5], I was counting waves the same way earlier but changed the counts when wave [5] extended more than 123%. Now, the counts seem correct as highly extended wave [5] retraced 100% with speed.

This whole pattern of the bounce from 9687-11171 can be bigger wave (B) of Irregular Correction followed by fast and furious wave (C) downwards OR It may be Impulse completed at 11171 and decline from 11171 is wave (A) of Simple Zigzag.

This chart is showing two possibilities, so let’s concentrate on decline from 11171 until we get clarity on daily chart.

Elliott Wave analysis of Nifty on 30 minute chart

Elliott Wave analysis of Nifty on 30 minute chart

This is 30 minute time bar chart of Nifty covering decline from all time high 11171 which is the start of downward impulse.

It seems an Impulse is already completed from 11171-10276 with extended wave (5) as marked on chart. This downward Impulse can be wave (A) of Simple Zigzag or wave (C) of Irregular Correction.

If this Impulse is wave (A) then normal 38%-61% retracement for wave (B) is placed at 10617-10829. So, 10617-10829 is the expected upside range in this case whereas 10617 is already achieved.

And the bounce after completion of this downward is slower and retraced only 38% (38% retracement is placed at 10617). On the other hand, inner wave (5) [started from 10702] of this downward impulse is highly extended but next bounce didn’t retrace this whole wave (5) with speed. (Extended wave 5 often retraces 100% with speed, personality of extended wave 5)

So, most of the conditions are favouring that the bounce started from 10276 is some sort of corrective pattern and Nifty still has possibility to decline below 10276 once again in coming days either from present levels or from 10637-10829 range.

Now, let’s analyze the bounce started from 10276 separately on lowest possible time frame chart to check its pattern.

Elliott Wave analysis of Nifty on 15 minute chart

Elliott Wave analysis of Nifty on 15 minute chart

This is 15 minute time bar chart of Nifty covering bounce from 10276.

It seems an impulse completed from 10276-10637. This Impulse can be wave (A) or (1), further (abc) decline from 10637-10398 can be wave (B or 2) and wave (C or 3) may be in progress from 10398.

Normal 100%-123% projection for wave (C or 3) is placed at 10759-10844 which is the expected target range on upside if I am right at identifying the pattern.

Within wave (C or 3), the whole pattern is not completely clear but two upside inner waves retraced slightly more than 61% which is indicating some sort of waves (1) and (2) followed by inner wave (i) and (ii) of (3).

Even if we look at the whole bounce after 10276 then: –

  1. First bounce from 10276-10637 retraced just about 61%.
  2. 2nd bounce from 10398-10590 again retraced just about 61%
  3. 3rd bounce from 10456-01618 again retraced just about 61%

If this pattern is Repeated Upside Impulsive waves followed by downward corrective waves then Nifty can bounce very sharply in straight line very soon. Minimum upside range is 10759-10829 and even higher but further possibilities can be calculated after seeing bounce above 10759.

Conclusion

There are contra/opposite views when we compare Medium Term and Short Term Charts.

When we look at the pattern of decline from all time high 11171 (medium term) then, the personality of the bounce from low 10276 is not suggesting any bigger reversal for new high and possibility of one more low below 10276 was still there in coming days from present levels or from 10637-10829 range.

But when we look at the pattern of bounce after 10276 (short term), then there are repeated upside impulsive waves and every wave is corrected by about 61%. There are 3 upside waves corrected about 61% within whole bounce after 10276. This condition is indicating a very sharp upside bounce soon and minimum upside range is 10759-10829 which can extend every higher but later possibility can be calculated after seeing bounce above 10759.

So first, we must go with the pattern of bounce from 10276 which is indicating the possibility of sharp bounce. And we need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

According to the conditions on charts, Short term trading strategy is “Buying on Dips” as longs as Nifty is trading above 10456 expecting sharp bounce towards 10759-10829 or even higher.

If Nifty has to bounce then it needs to bounce sharply from here without any delay but stoploss for buying is 10456 which is big. So, safe trade is to buy in 10500-10456 range using exact stoploss of 10455 expecting targets 10759-10829. But Nifty may not give chance to buy if it opens gap up and bounce sharply.

So, trade can also be done based on opening price. Note tomorrow’s opening price and wait for first 15 minute. Nifty if trades above tomorrow’s opening price at any time after 9:30 AM then risk can be taken to buy Nifty above opening price with stoploss of day’s low (day’s low at the entry of trade) expecting 10759-10829 as minimum upside target range which can extend even higher.

BANK NIFTY ANALYSIS

“Elliott Wave Analysis Reports of Bank Nifty” with “Bank Nifty Weekly Options Trading Strategies” Daily is also provided by one of my personally trained student Vinod Sharma on his website http://www.ewanalyst.com/ Links to some of his analysis Reports are: –

Tags: , ,

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 are closed.