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.

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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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