Nifty Elliott Wave Outlook for May 2016 Expiry Week

| May 22, 2016

Nifty opened flat on Friday followed by range bound consolidation between 7780-7812 but declined sharply later to register day’s low 7735 before closing 33 points down at 7749.

In Yesterday’s report, I expected a decline till 7752-7721 and also mentioned that Nifty can be bought if get in between 7752-7721 with stoploss 7709 expecting 60-90 points bounce. Nifty achieved 7752-7721 range and closed at 7749. Let’s have a fresh look at latest chart for further wave counts and outlook.

Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Analysis Report of Nifty for 02 May 2016.

Nifty Elliott Wave analysis for May 2016 expiry

Nifty Elliott Wave analysis for May 2016 expiry

This is hourly time bar chart of Nifty covering move from 29 Feb 2016 low 6825.

It is same as I explained in my earlier report that conditions are favoring the possibility of formation of Ending Diagonal (ED) on this chart after 7405. It may be wave (4) completed at 7405 followed by wave (5) is in progress as Ending Diagonal.

Wave (5) which is progressing as Ending Diagonal Triangle from 7405 already projected more than 61% and is in extended zone. So, we can see a sharp decline towards 7405 after completion of this ED above 7992.

Now, let’s have a separate look at this ED started from 7405 on separate chart for deeper understanding and inner moves.

Nifty Elliott Wave analysis for May 2016 expiry

Nifty Elliott Wave analysis for May 2016 expiry

This is again hourly chart of Nifty covering move after 16 Mar 2016 low 7405 which I have shown as start of wave (5) on first hourly chart progressing as Ending Diagonal Triangle (ED). It seems,

  1. Inner wave (i) completed from 7405-7777 as (abc)
  2. Wave (ii) completed from 7777-7516 as Simple Zigzag (abc)
  3. Wave (iii) may be completed from 7516-7978 as (abc).
  4. Wave (iv) may be in progress as Triple Zigzag correction with abc-x1-abc-x2 is already completed and last (abc) cycle is in progress and needs to complete below 7678. Nifty broke below the line joining previous lows 7516-7678 which confirmed that wave (iv) was not completed at 7678 and needs to complete below 7678 now. But wave (iv) should not break below 7516 (start of wave iii).
  5. After completion of wave (iv) below 7678, wave (v) needs to complete above 7992.

So overall, we can expect a decline below 7678 first as (abc) pattern followed by a good upside rally towards 7992 at least in (abc) pattern again, please look at the expected move on chart carefully. Nifty should not break below 7516 to keep this pattern intact.

Now, let’s have a look at decline from 7940 which I am expecting as start of last (abc) cycle of inner wave (iv) of Ending Diagonal (ED).

Nifty Elliott Wave analysis for May 2016 expiry

Nifty Elliott Wave analysis for May 2016 expiry

This is 5 minutes time bar chart of Nifty covering move from 17 May 2016 high 7940 which I am expecting as start of last (abc) cycle of inner wave (iv) [as Triple Zigzag] of Ending Diagonal (ED). This wave needs to complete below 7678 as (abc) pattern.

Here this decline from 7940 looks like an impulsive move with inner (1) completed at 7886, (2) completed at 7908, wave (3) completed at 7810, (4) completed at 7882 and wave (5) may be completed at 7735. Wave (5) is highly extended above 100% projection. Please look at all main and minor waves carefully on chart.

And this whole impulse completed from 7940-7735 may be wave (a) of last (abc) cycle of Triple Zigzag, where wave (b) upside is in progress and (c) downside may be pending for 7678 and below.

If wave (a) is completed at 7735 then wave (b) we can expect as 38%-61% of wave (a) which is placed at 7813-7861 followed by wave (c) downwards from 7678 and below.

Conclusion:

Medium Term outlook is same as, Nifty can decline below 7678 first followed by a very sharp bounce above 7992 but Nifty should not break below 7516 to keep this pattern intact. So, buying Nifty 7900 Jun Call options positional would be best strategy if Nifty achieves 7678-7600 with stoploss 7516 expecting minimum targets 7992. 7678-7600 range is just a rough minimum range and exact entry levels and stoploss can be calculated only once Nifty breaks 7678 which will be updated in my further daily reports.

For very short term or Intraday tomorrow, Nifty can show minimum bounce till 7813-7861 without breaking below 7735. Those who bought Nifty in 7752-7721 range on Friday as per previous report can place fresh stoploss for longs at Friday’s close 7749 expecting 7813-7861 on upsides.

Nifty can decline again below 7678 after achieving 7813-7861.

Any positional or intraday trade can be decided based on above mentioned conditions using strict stoploss.

Note: Nifty is moving in combination of complex patterns. So, please manage you trades accordingly as patterns are changing frequently and there will be no further updates on my blog for this week. You can join my Facebook group Practical Application of Elliott Wave Theory as I often upload my Daily Elliott Wave Analysis report after market hours.

Click Here to Learn Practical Application of Elliott Wave Theory  in real time trading/investment from the deep experience and true knowledge of Deepak Kumar .

Click Here to subscribe for  Daily Elliott Wave Analysis Reports of Nifty with Stop loss and Trading Strategy by email.

Also read,

Tags: , ,

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"