Nifty Can Bounce Till 8200-8400 Followed by Crash Again – Analysis on 17 Jan 2016

| January 18, 2016

Nifty opened gap up at 7561 but failed to sustain at higher levels and trade with weakness for rest of the day. Nifty declined more than 130 points from day’s high to register day’s low of 7427 before closing huge 99 points down at 7437.

On Friday, I expected a decline below 7425 again without breaking above 7633 and suggested to buy Nifty puts as stoploss was huge. Nifty declined till 7427 without breaking above 7633 and all Nifty put were near to double. Let’s have a fresh look at latest Nifty charts for latest scenario.

Today I am showing wave counts from March 2015 high 9119 as previous counts are same as I explained in my previous all time frame report Nifty is Highly Bullish for Long Term – Elliott Wave Analysis as on 05 Jan 2016.

Elliott Wave Counts of Nifty on Daily Chart

Elliott Wave Counts of Nifty on Daily Chart

This is daily time bar chart of Nifty covering move after Jan 2015 high 9119 which I have explained in many of previous analysis report and expecting it as a progress of Triple Zigzag.

Move from 9119-7539 was clear in my previous report which I expected as completion of (abc-x1-abc) followed by progress of wave (X2) but pattern for wave (X2) was not clear.

But now, there are some indications that wave (X2) may be in progress as “Irregular Correction” which needs to complete at or above red line drawn on chart which is around 8300-8400.

Wave (b) of this correction may complete somewhere at lower levels followed by sharp wave (c) upwards for 8200-8400 to complete wave (X2) followed by crash for new low again to complete last ‘abc’ cycle of Triple Zigzag.

So, we need to analyze wave (X2) separately to calculate its expected range:

Elliott Wave Counts of Nifty on Daily Chart

Elliott Wave Counts of Nifty on Daily Chart

This is again daily time bar chart of Nifty covering move from Sept 2015 low 7359 which I have marked as start of wave (X2) on first daily chart.

It seems wave (X2) is also progressing as “Irregular Correction” with inner wave (A) completed from 5539-8336 followed by wave (B) is progress which became Irregular after breaking below start of (A) 7539.

And within wave (B), it seems inner wave (a) completed from 8336-7714 followed by wave (b) from 7714-7972 which is “Irregular Correction” and inner wave (c) is in progress from 7972.

100%-123% of wave (c) of (B) is placed at 7350-7204. So, wave (B) of (X2) may complete around 7350-7204 range followed by sharp wave (C) upwards till 8200-8400 to complete wave (X2).

Now, we need to analyze inner wave (c) of (B) of (X2) on separate 15 minutes chart to calculate its expected range.

Elliott Wave Counts of Nifty on 15 Minutes Chart

Elliott Wave Counts of Nifty on 15 Minutes Chart

This is 15 minutes time bar chart Nifty covering decline from 01 Jan high 7972 which I have marked as start of inner wave (c) of (B) of (X2) on above charts.

  1. It may be wave (1) from 7972-7781.
  2. Wave (2) may be completed 7781-7810 which is irregular and not even 23%.
  3. Wave (3) may be completed from 7810-7425 which already achieved 161% projection after breaking below 7500, thus extended.
  4. Wave (4) may be completed from 7425-7604 as Simple Zigzag.

Wave 5 needs to project minimum 38%-61% which is placed at 7395-7265 where as 100% is placed at 7057. Wave 5 will be in extended zone after breaking below 7265.

So, wave (c) of (B) of (X2) may need to achieve 7395-7265 range but may not break much below 7057.

Now, we need to analyze inner wave (5) of (c) of (B) of (X2) on separate 5 minutes chart for latest scenario:

Elliott Wave Counts of Nifty on 5 Minutes Chart

Elliott Wave Counts of Nifty on 5 Minutes Chart

This is 5 minutes time bar chart of Nifty covering move 14 Jan 2016 high 7604 which I marked as start of inner wave (5) of (c) on above 15 minute chart.

It seems this wave is somewhere within inner wave (3). And within wave (3), it seems inner wave (v) is in progress which may complete somewhere below 7408, may be in 7386-7349 range followed by a 45-70 points bounce. Nifty may fall again after that 45-70 points bounce for wave (5). 

Conclusion:

Medium Term Outlook:

After analyzing all the charts, it seems Nifty may fall around 7350-7200 range followed by sharp bounce till 8200-8400 range without breaking much below 7057. And After achieving 8200-8400, Nifty may crash again for new low followed by biggest bull rally. And this whole process may take 2-6 months.

For trading purpose, Nifty March 7700-8000 calls may be bought after identifying the completion of irregular wave (B) of (X2) at lower levels around 7350-7200 range. Many strong stocks may give 40%-100% returns in this coming rally for 8200-8400. Trade with proper risk management and in calculated quantity to protect yourself from heavy losses in case we proves wrong in identifying pattern.

The lower range given above is just indicative based on Fibonacci Calculation and exact short range can be calculated when it is near to completion and same I will regularly update in my daily “Elliott Wave Analysis Report of Nifty”.

For very Short Term or Tomorrow,

Nifty can decline till 7385-7350 range followed by a bounce of 45-70 points. Any 45-70 points can be sold again with 33 points stoploss for new low as Nifty is within inner wave (3) on last 5 minutes chart where wave (5) is still pending.

Any exact trade can be decided only during live market hours after seeing latest wave pattern based on above given conditions. Trade light with strict stoploss to protect yourself from heavy losses.

Click Here to Learn Practical Application of Elliott Wave Theory  in real time trading/investment from the deep experience and true knowledge of Deepak Kumar .

Click Here to subscribe for  Daily Elliott Wave Analysis Reports of Nifty with Stop loss and Trading Strategy by email.

Also Read,

 

 

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.