Nifty Can First Bounce above 7583 followed by Good Decline – EW Analysis for 15 March 2016 Onward

| March 14, 2016

Please read this Elliott Wave  analysis report of Nifty carefully and completely rather than reading just Title. There are some important conditions explained which needs to understood carefully.

Nifty opened gap up today at 7542 and bounced sharply to register day’s high 7583 but failed to sustain at higher levels and declined gradually till 7515. Finally Nifty closed 28 points up at 7538.

We were holding positional hedge trade (Nifty April Future Sell and 8000 April Call buy in 1:8) which is in 60 points loss because of flat movement from last 6 session. Let’s see what latest charts are saying.

Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Outlook of Nifty for Budget Day 29 Feb 2016 Onward.

Elliott Wave Counts of Nifty for March 2016

Elliott Wave Counts of Nifty for March 2016

This is 15 minute time bar chart of Nifty covering move from 29 Feb 2016 low 6825.

There is no change in wave counts on this chart, as it seems wave (1) completed from 6825-7094 and wave (2) completed from 7094-6969 then wave (3) started from 6969. Wave (3) started slow but extended sharply later without even 23% correction in between.

The bounce from 6969 is straight without even a 23% correction in between and with unfilled gaps. So, it is bit difficult to identify waves but most probable counts I have shown on charts. May be it is inner wave (v) of (3) is in progress.

If it is wave (v) of (3) started from 7424 then 38%-61% projection for wave (v) is placed at 7628-7755 and wave (v) needs to achieve minimum 7628.

After seeing today’s move, there is possibility of “Ending Diagonal Triangle” at top for wave (v) of (3) which is explained on next chart.

So, we need to look at move after 08 March 2016 low 7424 which I have shown as start of inner wave (v) of (3) on above 15 minutes chart.

Elliott Wave Counts of Nifty for March 2016

Elliott Wave Counts of Nifty for March 2016

This is 5 minutes time bar chart of Nifty covering move after 08 March 2016 low 7424 which I have shown as start of inner wave (v) of (3) on above 15 minutes chart.

Yesterday there were many confusions but now this wave is following most of the rules of “Ending Diagonal” where,

  1. Wave (1) from 7424-7539 as (abc).
  2. Wave (2) from 7539-7460 as “Irregular Correction”.
  3. Wave (3) from 7460-7583 as (abc) which projected just above 100%. 100% projection for wave (3) is placed at 7575 and high is 7583.
  4. Wave (4) may be started from 7583 as Simple Zigzag where inner wave (a) is completed from 7583-7515, (b) may be completed from 7515-7547 and (c) may be pending. 100% projection for wave (c) of (4) is placed at 7479. So, wave (4) can complete around 7480 followed by bounce above 7583 again. But wave (4) should not even touch 7460 which is start of wave (3) so this pattern will be negated if Nifty even touches 7460.
  5. Wave (5) needs to complete above 7583 to complete ED but it should not break above upper red line joining wave (1) and (3).

So, if the pattern I have explained is right and this wave (v) of (3) is really progressing as ED then Nifty can first decline near 7480 but should even touch 7460. After decline Nifty can bounce again above 7583 to complete last wave (5) of ED followed by a sharp decline below 7424 again from where this ED is started.

This explained pattern (Ending Diagonal) will be negated if Nifty either break below 7460 before 7583 OR if Nifty broke upper red line joining wave (1) and (3) of ED (line joining points 7539 and 7583).

Conclusion:

Nifty charts are indicating an “Ending Diagonal Triangle” pattern at top and Nifty can first decline near 7480 followed by bounce till 7583-7628 range to complete this pattern. But Nifty should not even touch 7460 before 7583 to keep this pattern intact, even a touch of 7460 before 7583 will negate the pattern.

And if Nifty is really forming ED at top then we can see a sharp decline below 7424 after completion of this ED.

Above mentioned conditions will be negated if Nifty either break below 7460 before 7583 OR if Nifty broke upper red line joining wave (1) and (3) of ED (line joining points 7539 and 7583).

So for trading prospective, positional hedge trade suggested earlier (1 lot Nifty April Future Sell with Buying 8 Lots April 8000 Call, Nifty April Future Sell with buying 8000 April Calls in ratio of 1:8) can be exited as it is already in 60 points loss. This trade is in loss because Nifty didn’t break 7400-7600 range from last 6 sessions. This trade can give profit later but I never hold a trade which is already in 50 points loss let be any condition.

For Fresh Trade:

Nifty can be bought if get around 7480 with exact stoploss of 7460 spot expecting targets 7583-7628 (Nifty Calls can also be bought accordingly). And if Nifty fulfilled this trade and bounced above 7583 in 3 wave’s move (abc) then Nifty April 7300-7100 Puts can be bought in 7583-7628 range without stoploss expecting targets below 7424, Puts in this case to be bought in such quantity so that you will be comfortable with loss even if puts become zero.

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DISCLAIMER

Trading Strategies suggested in this Report:

Trading strategy suggested in this reports is just to show my subscriber how they can make trading strategies in different market conditions based on Elliott Wave Counts. These trading strategies are trading recommendations. Any trade based on these trading strategies will be your own decisions and I will not be responsible for any loss or profit for the same.

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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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