Nifty Elliott Wave Analysis and Trading Strategy for 19 Sep Weekly Expiry

| September 19, 2019

Nifty opened higher at 10872, registered high 10884 and declined back by about 80 points to register day’s low 10804 and closed 23 points up at 10840.

Yesterday, 10856-10893 was immediate resistance and 10893 was immediate upside breakeven point. Nifty was expected to decline below 10746 without breaking higher above 10893.

Trading strategy was to buy 10950 Put of 20 Sep expiry on bounce in 10856-10893 range using stoploss of 10907 expecting decline below 10746 soon. Nifty opened in selling range at 10872 and declined till 10804, 10950 Put bounced from 85-90 of 139. Further updates with fresh outlook and fresh levels were also sent. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott Wave Analysis of Nifty on daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [5] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave [iii] of [5] is completed at 11171 and [iv] may be completed at Irregular Correction at 10004 and wave [v] may be in progress. Wave [v] achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave [v] achieved 12103 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.

Elliott Wave Analysis of Nifty on daily Chart

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave [v] of [5] on daily chart.  Again, there is no major change in wave counts on this chart.

The bounce from 10004-12103 is confirmed as (abc) move because of overlapping of waves after break below 10985. Now we have 02 possibilities on this chart.

  1. The (abc) bounce from 10004-12103 is inner wave [1] of Ending Diagonal Triangle for wave [v]. If this is the case then Nifty can decline towards 10585 to complete wave [2] of ED and later Nifty can bounce slowly with volatility for new high to complete wave [3], [4] and [5] of ED. Possibility of ED will get negated if Nifty breaks below 10004 (end of wave [1]).
  • The (abc) wave completed from 10004-12013 is wave (B) of Irregular Correction. If this is the case then Nifty can decline towards 10004 to complete wave (C) of Irregular Correction followed by new quick Bullish Rally for new high.

Now, we need to focus on pattern of decline after 12103 to calculate further probabilities.

After 12103, it seems wave (a or 1) completed from 12103-11625, wave (b or 2) completed from 11625-11981 as Double Zigzag Correction and wave (c or 3) may be in progress. Pattern of wave (a or 1) is not clear.

Within wave (c or 3), it seems inner wave (i) completed at 11461, (ii) completed at 11706 as Double Zigzag Correction, (iii) completed at 10782 , (iv) or (v) may be in progress.

Wave (v) achieved its minimum 38% projection after but pattern doesn’t seem completed and internal waves overlapped. So there is possibility for wave (iv) to turn into Irregular Correction or some sort of Complex Correction.

38% retracement of this whole decline after 12103 is placed at 10982-11197. So, 10982-11197 is major resistance and 11197 is major upside breakeven point. Any major upside reversal can be expected after close above 11197 only.

Let me explain the possibility of Irregular Correction or Complex Correction on separate lowest possible time frame.

Elliott Wave Analysis of Nifty on hourly Chart

This is Hourly time bar chart of Nifty covering move after 10782 which I marked as start of wave (iv) on daily chart.

The bounce from 10782-11181 is Simple Zigzag (abc) move, the decline from 11181-10637 look like 3 waves (abc) move and later the bounce from 10637-11141 and decline from 11141-10746 is also (abc) move but the bounce after 10746 seems Impulsive.

Overall the pattern on this chart is very complex and there are multiple possibilities, either wave (iv) completed at 11141 as Double Zigzag with Irregular (X) or wave (v) progressing as Ending Diagonal Triangle (ED) or there is some other pattern going on which I am not able to understand yet.

Waves personalities wise, the bounce started from 10746 is slower than previous bounce (10637-11141). This slower bounce after 10746 is not indicating any good strength, so possibility of decline below 10637 cannot be ignored. Nifty already declined by 280 points from 11084.

Now, let’s have a separate look at decline after 11084 to check its pattern.

Elliott Wave Analysis of Nifty on 5 Minutes Chart

This is 5 minute time bar chart of Nifty covering decline from recent high 11084 which I am analyzing independently.

It seems wave (1) completed from 11084-10989, (2) may be completed from 10989-11052 and wave (3) may be completed from 11052-10796 and wave (4) or (5) may be in progress. [Wave (4) is either completed at 10885 or may complete somewhere near 10893]

38% retracement of progress of wave (3) is placed at 10893. 10893 is immediate upside breakeven point. We can think of any upside reversal after breaking above 10893 only.

If wave (4) already completed at 10885 then minimum 38%-61% projection for wave (5) is placed at 10774-10707.

Conclusion

Overall, Nifty is still in medium term negative zone with possibility of further decline towards 10585-10004. 11181-11197 is major upside breakeven point range and we can think of any major upside reversal after break above 11197 point only.

For Intraday/short term, 10893 is immediate upside breakeven point. Nifty is expected to decline further towards 10774-10707 without breaking higher above 10893. We need to check pattern again if Nifty breaks higher above 10893.

We need to keep all these conditions in mind while planning next trade.

Trading Points of View:

Overall, main trading strategy is “Selling on Rise” expecting further decline towards 10585-10440 whenever gets opportunity with small stoploss as long as Nifty is trading below major upside breakeven point 11197. We can think of any confident buying after close above 11197 only. Positional/Experienced/Hedge traders can make their own trading plan based on this condition.

For very short term/Intraday trade, 10900 Put of 20 Sep weekly expiry can be bought if get Nifty near 10893 using stoploss of 10907 expecting decline towards 10774-10707. Or traders can plan their own trade based on these levels. We need to check pattern again if Nifty trades above 10893 for more than 15 minutes.

Further, I will update about the formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast to all my “Nifty Live Updates” subscribers.

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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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