Nifty Elliott Wave Analysis for the Week Commencing 19 Oct 2015

| October 18, 2015

Last week was the dull week where nifty moved within just 50-80 points except sudden rise of 90 points on Friday just before closing. Nifty opened last week at 8231 and closed at 8238 after giving low of 8088. Overall last week was without any trading activity as no trade triggered as per conditions because of range bound movement. There was a small trading opportunity on Friday, but it was during live market hours and came just 60 minute before weekly close, so practically it was not safe.

So, today I am having a fresh look at whole decline from all time high 9117 to see if I can conclude something from bigger picture as well as smaller time frame. Please read my last week report Most Probable Elliott Wave Counts of Nifty as on 12 Oct 2015 to understand this report better. Let’s start with daily chart.

Nifty Elliott Wave Analysis for 19 Oct 2015

Nifty Elliott Wave Analysis for 19 Oct 2015

This is daily time bar chart of Nifty covering move after all time high 9117. If I look at the waves on this chart then Move from 7997-8655 (marked within light grey box) looks like an “Irregular Correction”. So,

The first wave of correction may be from 9117-7997 rather than from 9117-7940 followed by “Irregular Correction” from 7997-8655 followed by 2nd wave of correction started from 8655. Here,

First wave of correction from 9117-7997 looks like “abc” rather than an Impulse. And 2nd wave of correction started from 8655-7541 also looks like three waves move till now. And 2nd wave of correction is just 5 points short of 100% of first wave.   So there are 03 possibilities:

  1. Either this correction already completed at 7541 as “Double Zigzag” as (abc-x-abc). 9117-7997 as 1st abc, 7997-8655 as wave ‘X’ and 8655-7541 as 2nd “abc”. Nifty can go for new high in this case but step by step.
  1. Or this correction may turn into triple zigzag where (abc-x-abc) is already completed and (–x-abc) is still pending. Nifty can rise till 8450-8550 (Minimum till upper blue line) in this case followed by sharp decline for 7541 and below. This possibility will be negated after break above 8655.
  1. Or this is a normal ‘abc’ correction going on and Nifty can go below 7541 again but this possibility will negate after break above 8322.

Many of my students/subscribers were asking what the pattern is going on from all time high 9117. But I was not showing because I am not confident of any particular pattern till now. The pattern completed at low 7541 is not completely convinced for new high yet and we need to wait for further confirmation at next step.

So, I explained every possibility here on daily chart whatever I can understand. Now I can just wait for further clarity, till then I am concentrating on small inner waves only.

Let’s have a look at move after 08 Sep low 7541 on separate 30 minutes chart:

Nifty Elliott Wave Analysis for 19 Oct 2015

Nifty Elliott Wave Analysis for 19 Oct 2015

This is 30 minutes time bar chart of Nifty covering move after 08 Sept low 7541. There is no change in probable counts on this chart as I explained in my previous report, it is very difficult to counts wave in this chart because decline from 8055-7691 was impulse (5 wave’s move) and Nifty broke 8055 but a Correction can never be impulse. So, this impulse from 8055-7691 might be inner wave (c) of “Irregular Correction”. So, if I consider all the rules of EWT then most probably:

  1. An impulse may be completed from 7541-7879 which may be wave A or 1
  2. There may be “Irregular Correction” after impulse which completed at 7691 as shown on chart. This Irregular Correction may be wave B or 2. It is a big Irregular Correction which is rare.
  3. And there may be a start of next impulse from 7691 which may be wave C or 3. Wave C or 3 already achieved 100% and 123% projection after breaking 8028 and 8108 where as 161% projection is placed at 8237.

If I look at inner wave (3 or C) then, it seems inner wave (iii) completed at 8242, (iv) completed at 8088 and wave (v) is in progress. Minimum 38%-61% projection for wave (v) is placed at 8298-8428 which can be achieved in coming sessions if I am right at identifying.

Now, let’s have a look at move after 8088 on separate 5 minutes chart:

Nifty Elliott Wave Analysis for 19 Oct 2015

Nifty Elliott Wave Analysis for 19 Oct 2015

This is 5 minutes time bar chart of Nifty covering move after 8088 which I am expecting a start of inner wave (v) of (3 or C). This wave seems somewhere within inner wave (3) and have possibility for more upside. Stoploss of any longs should be 8190.

Conclusion:

For medium term there are 03 possibilities:

  1. Nifty can go for new high but here is no need for aggressive positional longs as Nifty will give chance after completing inner wave 1 of bigger upside impulse.
  2. Nifty can rise till 8450-8550 (Minimum till upper blue line)  followed by sharp decline for 7541 and below. This possibility will be negated after break above 8655.
  3. Or Nifty can decline below 7541 again without breaking above 8321.

Means there is no confident condition and we need to wait for it.

For short term or next week,

Nifty has possibility of minimum upside till 8298. But, Nifty even if manage to touch 8322 then further have possibility to bounce till 8450-8550. Stoploss for any longs should be 8190 as of now, means if Nifty broke below 8190 then we need to see fresh pattern again. Further pattern I will update in my daily reports.

If someone have patience to wait then it is wise to trade very low and avoid having big position till we see any clarity as this type of wave patterns often end with a big move which can be identified only when the actual time comes. Be strict to light and intraday trade only based on smaller inner wave patterns.

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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"