Nifty can Decline towards 10534-10333 in Coming Says

| February 11, 2019 | 0 Comments

Nifty opened lower at 11023, bounced to register day’s high 11041 but failed to sustain at higher levels and declined by more than 100 points with volatility to register day low 10925 and closed 125 down at 10943.

Yesterday, 11213 was very strong resistance and 11046-11001 was immediate support. 11001 was downside breakeven point and Nifty was expected to decline towards 10534-10333 in coming days if break and stay below 11001 for 15 minutes. I advised selling after break below 11001 but didn’t suggest entry levels and stoploss because it could be calculate after breakdown only.

Nifty broke below 11001 and declined till 10925. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott wave analysis of Nifty on daily chart.

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. There is no change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress.

Point of Cautions: – The reversal after completion of Irregular Correction is known to be sharp but the bounce after 10004 is slower when compared to the speed of wave (c) of Irregular Correction. So, we need to be cautious for one more low below 10004.

Now, let’s analyse the bounce started from 10004 separately to calculate internal moves.

Elliott wave analysis of Nifty on 5 hourly chart

This is 5 hourly time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart. There is slight change in wave counts. Actually the pattern formed at top is not in synchronisation with personalities and pattern is becoming very complex, so I am trying to adjust the counts accordingly.

It seems an impulse completed from 10004-10985 and same can be marked as wave (1). The one confusion within this wave counts is that, “inner wave (v) is highly extended but it is not retraced 100%.

From high 10985, the downside Impulse completed from 10985-10534 can be marked as wave (A). Further upside impulse from 10534-10923 can be marked as wave [a or 1], Irregular correction from 10923-10583 can be marked as wave [b or 2] and wave [c or 3] may be completed at 11118.

38% retracement of wave [c or 3] is placed at 10913, so 10913 is downside breakeven point and Nifty if breaks below 10913 can turn medium term trend to negative and result in further fall towards 10534-10333.

On the other hand, 10923 (end of wave [a or 1]) is pattern negation point. Nifty if touches 10923 then the pattern after 10534 will be confirmed as [abc] and will form Irregular Correction at Top.

Now, let’s analyse the pattern of decline after 11118 on separate lowest time frame chart.

This is 5 minutes time bar chart of Nifty covering decline after 11118.

It seems wave (i) completed from 11118-11043, (ii) completed from 11043-11111, (iii) may be completed from 11111-10952, wave (iv) may be completed from 10952-11022 and wave (v) may be in progress.

Wave (v) achieved its minimum projection after breaking below 10952, next 61%-100% is placed at 10919-10856. 100% projection 10856 is a rare case for wave (v).

The Impulse completed after completion of wave (v) could be inner wave (1) of (C) of Irregular Correction. 38%-61%-78% retracement if progress of this downside impulse is placed at 10998-11044-11076.

So, wave (1) of (C) can complete somewhere in 10925-10856 range, wave (2) can complete somewhere in 10998-11076 range followed by wave (3), (4) and (5) towards 10534-10333.

Conclusion

For Medium/Long Term: – Most of the conditions are favouring formation of Irregular Correction on top and indicating sharp fall towards 10534-10333 in coming days. Break below 10923-10913 will give more confidence to the possibility of fall. But trading must be done based on internal patterns only.

For short term: – A downward impulse is about to complete in 10925-10856 range from where is corrective bounce 70-120 points can be expected. But we can expect a sharp fall of minimum 170-250 points again after this corrective bounce.

11044-11076 is resistance and 11118 is pattern negation point on upside. 10925-10856 is immediate downside support.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

Short/medium trading strategy must be “Selling on Rise” whenever getting opportunity. 11044-11076 is low risk selling range and 11119 is stoploss for shorts. Minimum downside target would be 170-250 points which further can extend towards 10534-10333.

Intraday buying can also be done for 70-120 points target if get Nifty near 10856 using exact stoploss of 10839 (some points below 10856). This trade must be done with exact and strict stoploss because it is against the main trend and loss can be huge if trade gets wrong without stoploss. Avoid holding any buying overnight.

These are low risk trading strategies I can suggest in such conditions, otherwise traders can plan their own trades based on the conditions explained above.

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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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