Nifty Can Decline Below 8321 Without Breaking Above 8516 – EW Analysis for 18 Aug 2015

| August 17, 2015

Nifty opened mild gap up at 8530 to register a high above yesterday’s high but crashed by 100 points within 10 minutes after opening without giving any chance to take decision or initiate any trade. Then Nifty started rising gradually till 8514 again after registering low of 8428 followed by weakness again. Finally Nifty closed 41 points negative at 8477. Now, let’s have a look on latest charts.

Today I am showing wave counts after July 2015 high 8655 as previous counts are same as I explained in my previous Elliott wave analysis report Nifty can Correct to 8321-8180 in Coming Sessions – EW Analysis for 17 – 28 Aug 2015.

Nifty Elliott Wave counts for 18 Aug 2015

Nifty Elliott Wave counts for 18 Aug 2015

This is 3o minutes time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of correction after completion of Impulse.

By seeing the structure of waves, It seems wave (A) completed from 8655-8321, wave (B) completed from 8321 to 8621 ( there may be a Irregular correction pattern at bottom as move from 8321-8621 looks like impulsive rather than corrective). And there may be start of wave (C) from 8621 which needs to break end of wave (A) at 8321 at least and further can go till 100%-123% which is placed at 8287-8208.

Within wave (C ) started from 8621, there may be wave (1) completed from 8621-8338 followed by wave (2) at 8515 as retracement is more than 61% or it is wave (3) completed from 8621-8338 followed by wave (4) at 8515 where (4) gone deeper than normal. But in both cases, a low below 8321 at least is expected.  Let’s see the progress of wave (C) on separate 5 minutes chart.

Nifty Elliott Wave counts for 18 Aug 2015

Nifty Elliott Wave counts for 18 Aug 2015

This is 5 minutes time bar chart of Nifty covering move after 10 Aug high of 8621 which I am expecting at start of wave (C). It seems an impulse is completed from 8621-8338 followed by (abc) correction from 8338-8530 which is more than 61%.  This impulsive followed by corrective may be wave (1) and (2) and (3) started from 8530. Wave (3) needs to go more than 100% of (1) which is placed at 8247 and 123% is placed at 8180.

Again within in wave (3 of C), it seems inner waves (i) and (ii) are completed and (iii) in progress.   Overall we can see repeated downside impulsive followed by upside correctives in this chart which is suggesting a reasonable decline from current levels. So, there is low risk opportunity to sell Nifty at present levels using 8516 as stoploss {just above end of wave (ii)} expecting minimum target 8321 which further can extend till 8247 -8180. Let me show one more chart because of which I am in favor of selling.

Nifty Elliott Wave counts for 18 Aug 2015

Nifty Elliott Wave counts for 18 Aug 2015

This is again 5 minutes time bar chart of Nifty covering Intraday move of 17 Aug 2015. If we look at chart and plot waves then we can see:

There is downward impulse from 8530 -8428 followed by corrective bounce from 8428 -8515 in clear “abc” pattern. Then there is again downward impulse from 8514 -8463 followed by corrective bounce from 8463 -8493 in clear “abc” pattern which is exactly 61% retracement. And then there is again a smaller impulse from 8493 -8470.

Overall there are continues downward impulsive followed by upward correctives which warning a possibility of big downward impulse in coming sessions. That is the reason I am in favor of shorts with stoploss above end of wave (2). Break above 8515 (wave 2) will negate these wave counts.

Conclusion:

By analyzing all conditions on charts, we can expect a good correction in coming sessions. Minimum we can expect 8321 on lower side which further can extend till 8247-8180. So Selling on rise would be the best strategy for short term and longs positions must be avoided.

Nifty can be sold at present levels till 8493 using stoploss of 8516 which is just above end of wave (2). 8321 we can expect as minimum downside target which further have possibility to extend till 8247-8180. Breaking above 8516 will negate this pattern. Buying should be avoided even if Nifty break above 8416.

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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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