Nifty Can Give Short Term Bounce of 140-250 Points – EW Analysis for 06 Nov

| November 5, 2015

Nifty opened Gap down today and consolidated around 8000 for some time but then broke below 7995 and fell almost 90 points from previous close to register day’s low of 7944 before closing 84 points down at 7955. Our stoploss for buying was triggered and Nifty entered in next range of 7986-7906, there may be loss of 15-20 point loss if some traded as per strategy suggested yesterday.  Let’s see what latest charts are suggesting.

Today I am covering wave counts from last week high 8336 and read my previous report Most Probable Elliott Wave Counts of Nifty as on 02 Nov 2015 for previous wave counts.

Elliott Wave Counts of Nifty for 06 Nov 2015

Elliott Wave Counts of Nifty for 06 Nov 2015

This is 15 minutes time bar chart of Nifty covering move last week high 8336. There is slight change in wave counts as Nifty broke below 7996 and Nifty moved as per other possibility mentioned in last report.

Now, it seems it was wave (3) completed at 7997 followed by wave (4) completed at 8116 and now wave (5) is in progress from 8116. Wave (5) already achieved its minimum 38% projection after breaking below 7986 where as 61% is placed at 7906. Wave (5) will be in extended zone after 7906.

We can expect 38%-61% bounce of whole decline (from 8336 to new low) after completion of wave (5). Let’s have a look progress of wave (5) on separate 5 minutes chart.

Elliott Wave Counts of Nifty for 06 Nov 2015

Elliott Wave Counts of Nifty for 06 Nov 2015

This is 5 minutes time bar chart of Nifty covering bounce after 8116 which I am expecting as start of wave (5).

It seems inner wave (iv) of bigger (5) is already completed at 8025 and last wave (v) have been started as shown on chart. Wave (v) already achieved its minimum 38% projection whereas 61% and 100% is placed at 7942 and 7892 respectively. 123% projection is placed at 7860 which is rare possibility.

So, Nifty can show a small or big bounce from 7942-7892 range. 

Complexity within wave (4)

If we look at the pattern of wave (4) from 7997-8116 then there are two possibilities.

  1. Either it is an “Irregular Correction” (as marked by red counts on chart) as I also mentioned in my previous reports. But wave (c) (from 7997-8116) of Irregular Correction extended more than 561% of (a) in this case which is possible but very rare.
  1. If we consider wave (4) as Simple Zigzag (abc) (as marked by blue counts) then wave (c) is less than 100% which is possible but not what we normally see.

So, Nifty is following EWT rules but with very rare patterns. It is not new but going on from last 01 month. This type of rare patterns forms within Ending Diagonals and Triple Zigzag/complex Correction. That is the reason there is lack of confidence in wave counts and that’s why I am expecting this whole correction started from 9117 as some sort of very Complex Correction which still needs clarity. 

Conclusion:

Now, Nifty has possibility to bounce from 7942-7892 range and it may not break much below 7860. The bounce may be 38%-61% retracement of whole decline started from 8336. Thus, we can expect a bounce of 140-250 points after completion of this correction.

Light buying can be done if we see 7906-7892 on downsides using strict stoploss of 7859 expecting 140-250 points bounce. Otherwise we need to calculate entry levels and stoploss during live market hours if Nifty started bouncing from present levels.

Also Read:

Exact entry levels and best trading opportunity can be identified only during live market hour after seeing latest wave patterns on 5 minute chart. It is difficult to calculate exact entry levels in advance when market is range bound and sideways. Those you learned and understood Elliott Wave Theory can make better use of these market conditions for intraday swing trades during live market hours.

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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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