Nifty can go till 8849-8924 before 8727 – EW Analysis Report on 22 Jan 2015

| January 22, 2015

EW add 2

Nifty opened Gap up today and bounced to register the new all time high of 8772 in morning session followed by gradual decline of 45 points till 8727 with range bound volatility by end session but bounced sharply again in last 30 minutes of trade to hit new day’s high. Nifty closed 32 points green at 8761 after registering the low of 8727 and high of 8774. Let us take a look on charts.

Nifty Elliott Wave Analysis on 22 Jan 2015

Nifty Elliott Wave Analysis on 22 Jan 2015

This is 15 minutes time bar chart of Nifty covering move after 8066. By seeing the present structure it seems,

  • Wave (1) completed from 8065.89 to 8355.90 as Impulsive
  • Wave (2) completed from 8355.90 to 8236.75 as “abc” (Double Zigzag) corrective that corrected wave (1) by just 40%.
  • Wave (3) completed started from 8236.70 to 8526.84 which projected exactly 100% of wave 1. Thus wave (3) is not extended and next wave 5 can go extended to achieve minimum 61% projection.
  • Wave (4) completed from 8526.84 to 8452 which corrected wave (3) by 23%.
  • Wave (5) started from 8452 and achieved it minimum projection of 61% after hitting 8737. 70% projection for wave (5) is placed at 8775 and 100% placed at 8913.

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We need to see wave 5 closely to count and calculate its internal waves:

Nifty Elliott Wave Analysis on 22 Jan 2015

Nifty Elliott Wave Analysis on 22 Jan 2015

This is 5 minutes time bar chart of Nifty covering move after 8452 which I am expecting as start of wave 5. By seeing the chart it seems,

  • Wave 1 completed from 8452 to 8570
  • Wave 2 completed from 8570 to 8532 which corrected wave (1) by only 30%
  • Wave 3 completed from 8532 to 8772 which projected wave 1 by 200%, thus extended and we can expect normal wave 5
  • Wave 4 completed from 8772 to 8727 which seems complex correction and corrected wave 3 by less than 23%.
  • Wave 5 started from 8727 and is capable to project 38%-61% which is placed at 8849-8924.

Let us see last 2 day’s move on 5 minutes chart:

Nifty Elliott Wave Analysis on 22 Jan 2015

Nifty Elliott Wave Analysis on 22 Jan 2015

This is again 5 minutes chart of Nifty showing move after low of 8690

  • There is Leading Diagonal at the start which suggests the progressing move must be impulsive as Leading diagonal is only allowed for wave 1
  • The correction after high 8772 looks like a complex correction which cannot be wave 4 as it overlapped wave (2) after breaching 8728.15 and wave 4 can never overlap wave 2 in clean impulse. Which further suggests that the impulsive wave is completed at 8772 followed by correction till 8727 and there is a start of new wave upside from 8727 which is somewhere within internal wave 3 of next impulse.
  • The targets was next upside wave are expected as 8849-8924 as calculated on 2nd

Conclusion:

Charts are suggesting some more upside till 8849 to 8926 and Nifty should not break below 8727 to keep the upside wave running. So immediate stoploss for any longs should be 8727 and follow next waves for further possibilities. There need to be cautious at high in 8849-8924 range as there are indications of completion of a bigger impulse. Trade must be light and with strict stoploss and keep booking reasonable profits as there may be big moves both sides.

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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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