Nifty Elliott Wave Analysis and Outlook for the Week Commencing 28 Sep 2015

| September 26, 2015

Nifty opened gap down at 7838 followed by a sharp decline till 7804 but shown strength at lower levels and bounced gradually with volatility to register day’s high of 7894 before closing 22 points up at 7868.

I suggested part profit booking at lower levels on Thursday with 7883 as stoploss for rest as there were possibilities for  Nifty to bounce till 7928-8021 also if wave (5) going to be an Ending Diagonal. Nifty bounced from 7804 to 7894 on Thursday.  Let’s have a fresh look on latest charts now.

Today, I am covering Nifty wave counts after July 2015 high 8665 as previous counts are same as I explained in my previous Elliott Wave Analysis Report of Nifty. Please read: Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015.

Nifty Elliott wave counts for 28 Sep 2015

Nifty Elliott wave counts for 28 Sep 2015

This is hourly time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of downward impulse. There is no change in these counts as it seems,

  • Wave (1) completed from 8655 -8321
  • Wave (2) completed from 8321 – 8621
  • Wave (3) completed from 8621 – 7541
  • Wave (4) completed at 8055 as ‘abc’ which retraced more than 38%.
  • Wave (5) needs to go below 7541 at least to avoid 5th failure whereas 61% projection is placed at 7366 which may or may not be achieved.

So, this chart is suggesting a decline below 7541 in coming days/weeks without breaking above 8055. This pattern will be negated if Nifty managed to break above 8055.

Now let’s have a look at decline from 8055 to analyze progress of wave (5).

Nifty Elliott wave counts for 28 Sep 2015

Nifty Elliott wave counts for 28 Sep 2015

This is 5 minutes time bar chart of Nifty covering decline after 18 Sep 2015 high 8055 which I am expecting as a start of bigger wave (5 shown on first hourly chart.

Today I am showing my wave counts keeping in mind the possibility of bigger wave (5) (started from 8055, see first hourly chart) as Ending Diagonal Triangle. It is still a possibility till now after seeing the personality of move which needs confirmation.

Please read my previous report Elliott Wave Analysis Updates of Nifty for 24 Sep 2015 carefully to understand why I am expecting the possibilities of Ending Diagonal Triangle here.

Ending Diagonal Triangle pattern is always a wave (5) which consists of five inner waves with (3–3–3–3–3) or (abc–abc–abc–abc–abc) structure with wave (4) overlapping wave (2) and always progress in a Wedge/ Triangle.

So, maybe it is inner wave (1) of Ending Diagonal completed from 8055–7723 as ‘abc’ and wave (2) is in progress. Wave (2) is often 61% or above in Ending Diagonal and can go till start of inner wave (c of 1). 61% retracement of wave (1) is placed at 7928 and inner wave (c of 1) is started from 8021.

So, Nifty can bounce till 7928–8021 to complete wave (2) if this pattern is going to be Ending Diagonal (ED), but can never go above 8055 as wave (2) can never break the start of wave (1) in any case. We need to see wave’s pattern again if Nifty managed to break above 8055.

As I said above, it is just a possibility till now by seeing the personality and wave’s structure of decline after 8055, and will be confirmed only if Nifty completes wave (2) in 7928–8021 range as simple zigzag or any other corrective pattern. There is no sign of Corrective pattern within bounce from 7723–7894 yet.

This bigger wave (5) started from 8055 still have possibilities to progress as clean impulse with deeper retracement and higher extensions till Nifty is trading below 7911. (Read my previous report for 24 Sep 2015).

Also Read,

Conclusion:

Possibilities for Nifty to break below 7541 are still there in coming days/weeks to complete wave (5) but this wave (5) have both the possibilities to progress as “Ending Dagonal” or “Clean Impulse”.

Nifty can decline from 7928–8021 range if wave (5) going to be ED. Or Nifty can decline without breaking above 7911 if wave (5) is going to be a clean Impulse. But Nifty should not break above 8055 and suggesting decline in both the cases.

So, medium term Strategy should be “Selling on Rise” only until we see 7541 or any change in current wave’s pattern. Any change in wave’s pattern, trailing stoploss for sell and inner levels will be updated in daily Elliott Wave Analysis reports of Nifty.

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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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