Nifty can Decline Towards 10729-10585 Again

| March 4, 2019

Nifty opened higher at 10842, traded in narrow range on 50 points between 10823-10877 and closed 71 points up at 10863.

Friday, I just sent general outlook and trading strategy because I was not able to prepare and send complete analysis report. The possibility of decline towards 10729-10585-10534 was still there and 10865-10898 was immediate resistance.

Trading strategy was to sell Nifty if get in 10865-10898 range using exact stoploss of 10901 expecting decline towards 10729-10585 in coming days. Nifty entered in 10865-10898 range, registered high 10877 and closed as 10863. Our selling in 10865-10898 range was triggered. 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. Again, there is no change in wave counts on this chart.

From high 10985, the downside Impulse completed from 10985-10534 can be marked as wave (A). Irregular wave (B) may be completed from 10534-11118 with inner wave [a] from 10534-10923, [b] may be completed at 10923-10583, [c] from 10583-11118 and wave (C) may be completed at 10585 or still in progress.

Wave (C) started from 11118 must be Impulse. Normal 100%-123% projection for wave (C) is placed at 10667-10560 and Nifty already entered in this range, so wave (C) already achieved minimum projections.

Normally, wave (C) of Irregular correction completed near the after the end of wave (A). End of wave (A) is 10534, so we can expect wave (C) to complete near 10534 or below.

If we assume the bounce from 10004-10985 as impulse then its inner wave (v) is extended and start of extended wave (v) is 10333. Extended wave (v) often retraces 100%, so we can expect fall towards 10333.

After combining all the conditions and personality of move on this chart, wave (C) achieved its minimum projection but other conditions are indicating the possibility of fall towards 10534-10333.

BUT, Wave (C) registered low 10585 and retraced by more than 61%, so we need to analyze the progress of wave (C) separately on lowest time frame chart to check if an Impulse pattern is completed or not.


Elliott Wave Analysis of Nifty on 30 minutes Chart

This is 30 minutes time bar chart of Nifty covering decline after 11118 which I marked as start of wave (C) of Irregular Correction on 5 hourly charts. There is no major change in wave counts on this chart.

An Impulse is already completed from 11118-10620 with highly extended inner wave (v) and same we can mark as wave (A or 1), but there is possibility of Irregular correction from 10620-10939 and same we can mark as wave (B or 2), and wave (C or 3) may be in progress.

Normal 100%-123% projection for wave (c or 3) is placed at 10441-10323. So, 10441-10323 is the normal expected range for completion of wave (C or 3).

Now, let’s have a separate look at progress of wave (C or 3) started from 10939 on separate lowest possible time frame.


Elliott Wave Analysis of Nifty on 5 minutes Chart

This is 5 minutes time bar chart of Nifty covering decline after 10939 which I marked as start of wave (C or 3) on 30 minutes chart.

I seems an impulse is already completed from 10939-10751 and same can be marked as wave (a or 1). 61%-78% retracement of wave (a or 1) is placed at 10867-10898 whereas Nifty registered high 10877.

Wave (b or 2) look like a complex correction and it may be either completed at 10877 or still in progress. This (b or 2) can be either Double Zigzag or Triple zigzag but it is very difficult to identify exact pattern. I tried to mark most probable counts for this wave but still the counts are not convincing.

We can expect wave (c or 3) towards 10729 again after completion of wave (b or 2)

Conclusion

For Medium: – There is no change in medium/long term outlook, Most of the conditions are still favouring fall towards 10585-10333 in coming days because of Irregular Correction at bottom. We can calculate further move after reaching 10585 only.

For short term: – 10867-10898 is still the immediate resistance and Nifty can decline further towards 10729-10585 in coming days. Resistance 10867-10898 is based on Fibonacci retracements of wave (b or 2) but pattern of wave (b or 2) is not clear. So, Nifty if break this resistance then 10909-10939 is next resistance after 10867-10868

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

Trading Points of View:

There is no change in trading strategy: –

Overall Short/medium trading strategy must be “Selling on Rise” whenever getting opportunity with small stoploss expecting decline towards 10729-10585-10333 in coming days. We need to take help of small internal patterns to calculate entry levels and small stoploss.

Those who sold Nifty in 10865-10898 range on Friday can hold the same with same stoploss of 10901 expecting decline towards 10729-10585 in coming days. Exit the trade if stoploss triggers and wait for next opportunity but avoid buying because 10909-10939 is next resistance.

This is low risk trading strategies I can suggest in such conditions in advance, 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"

Comments (1)

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  1. VeenaSharma1998 says:

    Thank you sir.