This Elliott wave analysis report of Nifty for 13 July 2016 I am posting specially for my book subscribers and learners for future reference as there is perfect example “Irregular Correction” explained in this report. This report is not complete as complete report with Conclusion and Trading Strategy is sent to my existing subscribers only by email.
Nifty opened gap up at 8502 and traded in narrow range of 20 points between 8500-8480 for most of the day followed by a bounce of 40 point to register day’s high 8526 before closing 53 points up at 8521.
Yesterday I mentioned 8407 as important point below which only we can think of any reversal and extended immediate upside targets at 8502-8539. Nifty achieved 8502 at opening only followed by further bounce till 8526 and closed near high of the day. Let’s have further look at fresh chart.
Today I am covering move from 24 June 2016 low 7927 as previous waves are same as I explained in my previous analysis report Elliott Wave Analysis Report of Nifty for 11 July 2016
This is 15 minutes chart of Nifty covering move from 24 June low 7927 which I am expecting as progress of new impulse upside. This is the same chart which I explained in my last report as there is no change in wave counts on this chart.
It may be wave (1) completed from 7927-8120, wave (2) completed from 8120-8056, wave (3) completed from 8056-8398, wave (4) may be completed from 8398-8287 and wave (5) is in progress.
Minimum 38% projection for wave (5) is already achieved after break of 8466 whereas next 61% projection is placed at 8578 which may or may not be achieved.
So, we need to look at the progress of wave (5) started from 8287 separately to see its further progress.
This is 5 minutes time bar chart of Nifty covering bounce from 08 July low 8287 which I am assuming as progress of wave (5) till now.
There are 02 repeated upside impulses followed by corrective at bottom looks like wave (i) and (ii) followed by Inner wave (1) and (2) of (iii) completed till 8311 as shown on chart.
And as whole, it seems wave (iii) is in progress where inner wave (4) of (iii) completed at 8433, (5) of (iii) is in progress from 8443.
Wave (5) of (iii) achieved minimum 38% projection after breaking above 8502 and next 61%-70% projection is placed at 8539-8552 which may or may not be achieved. Wave (5) of (iii) will be extended after breaking above 61% projection.
So, 61%-70% projection of wave (5) of (iii) (8539-8552) is the range where we need to look at the pattern carefully as there are possibilities of some pause or small correction of 70-120 points from this range or from bit higher levels. But we can’t be confident in advance as we should not try to guess the top of wave (iii) or (3).
23%-38% retracement of whole wave (iii) started from 8303 is placed at 8473-8440. So, 8440 is the point below which we can think of any reversal and stoploss for any positional longs.
Formation of “Irregular Correction” and good Risk/Reward Intraday Trading opportunity:
This is 5 minutes time bar chart of Nifty covering today’s intraday move.
This chart is posted for students/learners to show them the perfect example of “Irregular Correction” formed on 5 minute chart and to explain how we could use this “Irregular Correction” pattern for a very good Low risk / high reward trading opportunity.
There is formation of “Irregular Correction” pattern in 3-3-5 structure today from 8502-8481 as explained on chart with,
- Wave (a) completed from 8502-8479 in 3 waves “abc”.
- Wave (b) completed from 8479-8505 in 3 waves “abc” and broke the start of (a).
- Wave (c) completed from 8505-8471 as clean impulse and projected 100%-123% of (a).
This pattern could be identified clearly when Nifty gave an impulsive decline towards 8481 after completing 3 waves (abc) move from 8479-8505. And there was a good trading opportunity after seeing 38%-61% projection of wave 5 of (C) with stoploss below 100% for the minimum target of new high. Please read the chart carefully.
Irregular Correction explained deeply in this article: Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar
We need to understand and remember these patterns like Leading Diagonal, Ending Diagonal, Triple Zigzag, Irregular Correction and Flat correction on tips because identification of these patterns alone can give you great trading opportunities and huge profits even if you are not able to identify previous waves.
Some of these patterns are explained deeply in these articles:
- Ending Diagonal Triangle (ED) Pattern of Elliott Wave Theory Explained by Deepak Kumar
- Triple Zigzag Correction of Elliott Wave Theory Explained by Deepak Kumar
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