Nifty can decline below 8800 before 8895 – EW Analysis of Nifty for 19 Feb 2015

| February 18, 2015

Nifty opened flat today but traded with positive bias whole day to touch intraday high of 8894 followed by a sharp decline of 30 points at the end. Nifty also broken 8847 which I suggested yesterday as trailing stop loss for existing shorts as the overlapping of waves at top were not signalling any good down move yet. As I mentioned before, there is a possibilities for the formation of upwards complex correction which is often tricky and we need to concentrate on its smaller waves to identify very next immediate move. Let see what charts are suggesting now.

Elliott wave counts of Nifty as on 19 Feb 2015

Elliott wave counts of Nifty as on 19 Feb 2015

This is 5 minutes time bar chart of Nifty covering move after recent low 8473.

As I explained in my last two reports, the move started from low 8473 doesn’t looks like an clean impulse upside but seems to be in progress as complex correction which would be either double zigzag or triple zigzag as presented on chart. And it seems 2nd “abc” cycle completed on Monday at high 8870 with a connecting wave (X1).

Yesterday, we were expecting some lower levels for the wave (X2, started from 8870). But now, it seems wave (X2) turns into 3-3-5 Irregular correction as inner wave (b) broke above previous high 8870. Thus, we can expect wave (c) to go till end of wave (a) which is at 8793. This pattern will be negated if Nifty break above 8895 again.

If it is formation of Triple Zigzag then Nifty needs to touch or break below lower (light blue) line shown on chart as any part of 2nd (abc) cycle should not be below the line joining (X1) and (X2).

Lets us see the structure of Irregular Correction at top on separate chart:

Elliott wave counts of Nifty as on 19 Feb 2015

Elliott wave counts of Nifty as on 19 Feb 2015

This is again 5 minutes time bar chart of Nifty covering only the formation of expected Irregular Correction at top for (X2). There seems the formation of 3-3-5 Irregular Correction with (abc-abc-12345) as inner waves where (abc-abc) is already completed and last impulse (12345) has started. Please read the chart carefully and read the topic “Irregular Correction” of my book for clarification.

Wave (c) downwards can be aggressive and faster if I am right at identifying it as Irregular Correction. And that is the reason I updated on my Facebook timeline and Facebook Group “Practical Application of Elliott Wave Theory” today around 2:45 PM that “Nifty… Don’t be surprised if you see a sharp decline below 8800 again… Just an alert..!!

Conclusion:

 The set up on charts is suggesting some sharp decline till 8800 or below and nifty should not break above 8895 again to keep this pattern validated. Open or break above 8895 can show good upside move if it is a start of new upside impulse. So, stoploss for any existing shorts must be 8895.

Note for my Students and Learners:

Please observe and make notes of the internal structure and behaviors of the move started from 8473. Observe how Nifty reacts within this formation. I am excited to know the outcome of this move.

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 (12)

Trackback URL | Comments RSS Feed

Sites That Link to this Post

  1. Outlook of Nifty on Union Budget 28 Feb 2015 | Sweeglu : Sweeglu | February 22, 2015
  1. Hiren says:

    Hello Sir
    Good Job,
    What will happen after Budget Can you tell us ?
    is the Upmove for Market is still intake. Or there will be any downside?

    • Deepak Kumar says:

      Hi Hiren, As you see I use Elliott Wave Theory only to analyze market and never use any other technical indicator and never follow FII data, Open Interest, news and events. So, I know nothing about Budget. Whatever the outcome will be, wave’s pattern will show everything in advance. These news, events, FIIs figures are just subject of entertainment used by many analysis firms and news channels etc to keep the common people engage. Market follows its own path, no matter how bad or good the news/decision is.

  2. Dharmarajan Ananthanarayanan says:

    Deepak,

    In your Feb 1st report, you had mentioned lower levels before 8911, so would it have been easier to keep the same level for SL for shorts?

    Also now for pull up, can we see break of 8911? thanks.

  3. Nish Thakker says:

    Hi, Deepak Kumar,

    Hats off to you sir…!!!

    superb wave count done…

    todays low(till 13.30 hr) as per your analysis is achieved.

    now what is your next moves as per your analysis?

  4. Deepak Kumar says:

    Nifty Updates:

    I was absolutely right at identifying the latest pattern as “Irregular Correction” and about sharp decline till 8800.. But I failed to identify the top.. Actually I assumed that last upside wave (c) of Irregular Correction completed yesterday at 8994 as it was near to 100% of (a) but the 5th of (c) was still pending (the most difficult one).

    It happens many times in advance analysis.. and it is natural. These are some factors which prevent us to catch every move of market perfectly.

  5. TR says:

    Nifty spot broke 8895….after making high of 8902.25 on spot it declined sharply to 8809.95….do you think more down side now or as mentioned in the above letter it is going to be abc – abc-12345 now?????

    Thanks in advance

    • Deepak Kumar says:

      It is abc – abc-12345 only but I assumed upside abc completed at 8894 yesterday where as it completed today at high 8902. It was my failure to identify the top of last upside wave “C”.

      • TR says:

        Thanks for quick turn around deepak…Appriciated your response…

        So now…wave C started and going to complete at 8793 (end of wave a)…

        Now, let me go through your previous (day before yesterday or so) articles to refresh myself to catch the next wave after completing 8793…

        Thanks Much…

  6. Hemant K. Kulkarni says:

    I come here everyday. Good to see that you are trying hard with all such technical details. Keep it up!

  7. NarasimhaReddy says:

    Nifty also broken 8447 which I suggested yesterday as trailing stop loss for existing shorts ==> Typo – It should be 8847.

  8. Saravana Perumaal Su says:

    Hi,

    I find the analysis interesting but sometimes confusing.

    I am a regular Nifty Futures intra-day and positional trader.

    For me 8920 levels on Futures remains a key resistance. Also fall below 8860 on Futures could result in a sharper fall.