Nifty can show 8645 before 8886 – Elliott Wave Analysis of Nifty for 16 Feb 2015

| February 15, 2015

Nifty opened gap up on Friday and traded with strength for rest of the day. Nifty opened at 8741 followed by small decline till 8729 and then bounced gradually to touch the intraday high of 8822 as expected in last report. Finally Nifty closed 94 points up at 8805. Let analyse latest Nifty charts for further possibilities.

Let me show bigger wave cycle of Nifty on daily chart:

Elliott Wave Analysis of Nifty for 16 Feb 2015

Elliott Wave Analysis of Nifty for 16 Feb 2015

This is daily time bar chart of Nifty showing move after Aug 2013 low of 5118 which I am expecting as bigger impulse started from 5118 .  It seems:

  • Wave 1 completed from 5118 to 6343 as clean impulse
  • Wave 2 completed from 6415 to 5933 as Irregular Correction which corrected wave 1 by only 38%.
  • Wave 3 completed from 5933 to 8996 which projected by 250% of 1. Thus, wave 3 is extended and we can expect 23% to 38% correction for wave 4. Inner wave (5) of 3 is highly extended and completed as Ending Diagonal Triangle.

If wave 3 is completed at 8996 then normal correction we can expect for wave 4 as 23% to 38%. 23% placed at 8273 and 38% placed at 7825. Wave 4 can end before 23% also, I am just indicating normal correction ratios and exact levels can be identified after seeing live waves.

Nifty declined to 8470 till now and I need to see the decline from high 8996 separately on lower time frame charts for further clarifications.

Elliott Wave Analysis of Nifty for 16 Feb 2015

Elliott Wave Analysis of Nifty for 16 Feb 2015

This is 30 minutes time bar chart of Nifty covering move after high 8996. The up move after low 8473 till 8822 doesn’t looks like a clean impulse. The personalities of waves are not suggesting any clean impulse upside here. So, there are possibilities that the move started from low 8470 forming a “Complex Correction”.

So, it may be 1st “abc” cycle of correction from 8996 to 8470 (as shown on chart) followed by progress of wave (X) upwards. Wave (X) is mostly a corrective wave but doesn’t carry any particular personality. We also see wave (X) covers full wave (c) of pervious “abc” cycle most of the time. 61% of whole “abc” cycle from top is placed at 8777 which is already achieved and start of wave (c) is 8838.

Wave (x) started from low 8470 is also seems to be in progress as double zigzag or triple zigzag as marked on chart. Nifty needs to go till 8645 once in case of Triple Zigzag to overlap 1st ‘abc’ cycle and need to decline below 8470 again in case of Double Zigzag. Thus, the minimum decline till 8645 is expected in both the cases.

Inner wave (c) of 2nd “abc” cycle projected exactly 123% of (a) till now as I shown on previous report where as 138% is placed at 8844 and 161% is placed at 8886. So, roughly we can expect Nifty to stay below 8886 only as wave (c) rarely goes beyond 161%.

Let’s have a look on last wave (c) of 2nd “abc” cycle started from 8600 on 5 minutes chart to calculate its limitations:

Elliott Wave Analysis of Nifty for 16 Feb 2015

Elliott Wave Analysis of Nifty for 16 Feb 2015

This is 5 minutes time bar chart of Nifty covering move after recent low 8600 which I am expecting as start of wave (c) of 2nd “abc” cycle. It seems, inner wave (4) is completed at 8735 as marked on chart and wave (5) already achieved its minimum projection of 38%. 61% for wave (5) is placed at 8838 and 70% placed at 8852.

I am not able to identify if wave (5) complete or not as it is difficult to identify its inner waves but calculation are not suggesting any big rise above 8838 -8852.

Conclusion:

The structure of charts is showing a formation of complex pattern and decline till 8645 looks possible and Nifty may not break above 8886 before touching 8645. Any trade can only be initiated after seeing small downward impulse followed an upward corrective wave with high as stoploss. Never trade heavy, and trade with strict stoploss as it is always difficult to understand the nature of Complex Corrections. Protect yourself with small stoploss in case we are wrong in identifying.

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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 (5)

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  1. algae says:

    interesting analysis. will follow your work and hope mkts toodo so
    tnx

  2. rajveer says:

    looks like we had a parabolic rise from the 2008 highs of 6350 to current levels following the elections, some of that excessive euphoria will be done away with in short order.

  3. jeyaprakash says:

    Very helpful to beginers