Nifty Elliott Wave Updates for 09 Nov 2016 Onward Ahead of Important Events

| November 9, 2016

Nifty opened good gap up at 8540 but failed to sustain at higher levels and traded with negative bias for most of the day. Nifty declined gradually to register day’s low 8480 but bounced sharply by 80 points in last 60-90 minutes to register day’s high 8560 before closing 46 points up at 8543.

Yesterday, immediate stoploss for longs was 8481 until the targets 8535. And further if break 8537 and buy on decline systematically. Target 8535 met at opening only and 8537 was also broken but Nifty started consolidating below 8537 so I sent an email alert during market hours to avoid holding overnight longs because there is an important event and bounce is lacking the personality and if correction is not completed yet then we can see a 130-250 points decline, may be with huge gap down ahead of important event. Let’s have a fresh look at latest charts for further scenario.

Today I am covering the decline from yearly high 8968 and previous wave counts are explained in my previous analysis report Further Elliott Wave Updates of Nifty for 07 Nov 2016 Onward

Elliott Wave Analysis of Nifty for 07 Nov 2016

Elliott Wave Analysis of Nifty for 07 Nov 2016

This is hourly time bar chart of Nifty covering decline from 8968 showing the possibility of complex correction “Triple Zigzag” (abc-X-abc-X-abc) pattern. This is the same chart with explanation which I explained in my last report as there is no major change in wave counts on this chart.

By casual look, it seems double zigzag (abc-X1-abc-X2) may be already completed from 8968-8736 whereas 3rd and last (abc) cycle may be in progress. 61%-100% projection for last (abc) cycle is placed at 8481-8324 where 8481 is already achieved. But maximum limit for last leg of this Triple Zigzag is up to the lower line joining C1-C2 which is way below 8200.

But there is small abnormality in last (abc) leg of this expected Triple Zigzag because wave (c) of last (abc) leg projected more than normal 100%-123% which is explained on next 15 minutes chart.

Read this explained article to understand everything about “Triple Zigzag Correction”: Triple Zigzag Correction of Elliott Wave Theory Explained by Deepak Kumar 

Now, let’s analyze last (abc) leg started from 8736 for more clarity.

Elliott Wave counts of Nifty

Elliott Wave counts of Nifty

This is 15 minutes time bar chart of Nifty covering decline from 24 Oct 2016 which can be last (abc) leg of Triple Zigzag or a progress of downward impulse.

The first impulsive decline from 8736-8550 can be wave (A), next corrective bounce from 8550-8678 can be wave (B) as Simple Zigzag Correction and further wave (C) may be completed from 8678-8400 as wave (A) is overlapped after breaking above 8550. Last wave (5) of expected (C) was extended which also retraced almost by 100% with speed; giving the signs that wave (C) may be completed at 8400.

Further 38% retracement of wave (C) is broken and reflex point is also broken. So, if the counts I have shown are correct then Nifty should reverse without breaking below 8400. Otherwise Nifty can break below 8400 only if there is any hidden Irregular Correction formed at bottom and the impulsive bounce from 8400 is inner wave (c) of that hidden Irregular Correction.

So, let’s have a careful look at bounce from 8400 to see the progress of bounce.

This is 5 minutes time bar chart of Nifty covering bounce from 04 Nov low 8400.

Elliott Wave counts of Nifty

Elliott Wave counts of Nifty

It seems Am impulse is completed from 8400-8540 followed by progress of Irregular Correction or an impulse is completed at 8560. 61%-78% retracement of the impulse is placed at 8453-8429. So, if reversal has to happen according to this pattern then it has to happen from 8453-8400 range without breaking below 8400. Possibility of this pattern will be negated below 8400.

Otherwise, if Nifty breaks below 8400 then there must be a hidden Irregular Correction formed at bottom and this upside impulse may be inner wave (c) of Irregular Correction rather than wave (1). Lower levels cannot be calculated in this case.

Conclusion:

Same as I explained yesterday, overall pattern from top 8968 looks corrective because of repeated overlapping of waves with this decline. This corrective pattern can be either Triple Zigzag Correction as explained on chart or some other type of correction which I am not able to identify yet. Overall pattern is following maximum rules of Triple Zigzag.

So overall, for 8968 is expected in coming weeks or months but time cannot be predicted. If the pattern completes at “Triple Zigzag” then Nifty can cover whole decline from 8968 within 8-10 sessions but if it is some other type of correction then time cannot be predicted. According to personality of decline, if reversal has to happen then the reversal is expected to be sharper.

According to pattern explained, indications of reversal are from 8543-8400 range without breaking below 8400 but if Nifty opens below 8400 then reversal is still possible but lower range cannot be calculated.

For Trading Point of View: –

Medium term targets of 8698 in medium term are still maintained and bottom seems near but there are sensitive events within couple of days. So, wave can retrace/project heavily more than normal limits and there can be a big range where maintaining stoploss is impossible. Based on the chart, either Nifty can reverse from 8453-8400 or if open below 8400 then also reversal can happen but we can’t calculate bottom range so we need to prepare trading strategy where we can be safe and can protect our trade with small stoploss.

So, as the correction completed its minimum requirement. Our strategy for coming days (09 Nov 2016 onwards) must be to Buy Nifty only if any day Nifty trades above opening price between 9:30-9:45 AM using strict stoploss for 35 points and hold for next day only if Nifty close near high of the day. This strategy will protect us from big loss if we are wrong in analyzing and will help us to catch good upside move if we are right.

Please don’t be in panic and take trading decisions with cool mind and patience. Never make huge losses in panic before seeing a safe and best opportunity. It is better to be without trade if you are not stable and are not ready for the consequences.

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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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