Nifty has Possibility to Decline Towards 9956-9859 in Coming Days – Elliott Wave Analysis

| July 28, 2017

Nifty opened higher at 10063 and bounced further to register day’s high 10114 but failed to sustain at higher levels and declined back by more than 100 points from high to register day’s low 10005 before closing flat at 10020.

Yesterday, I mentioned that some sort of Impulse is about to completed may be around 10070-10111 range and a small or big correction is expected very soon after completion of this impulse. And suggested to book profit in all longs and wait for any reversal pattern to form to initiate next trade. Nifty achieved 10070-10111 range and declined back by more than 100 points after registering high 10114. Let’s have a fresh look at latest charts for further scenario.

Today I am analyzing bounce from 30 June 2017 low 9448 and earlier wave counts are explained in my previous analysis report Further Elliott Wave Analysis Updates of Nifty for 13 July 2017 Onward

Elliott wave counts of nifty for 28 Jul 2017

Elliott wave counts of nifty for 28 Jul 2017

This is 30 minute time bar chart of Nifty covering bounce from 9448 which I am expecting as start of new Impulse. It seems an Impulse had been completed from 9448-10114 has been completed with extended wave (5) and correction has been started.

Normal 23%-38% retracement of this impulse is placed at 9956-9859 which is the expected target range for downside if correction is already started.

Let’s have a separate look at inner wave (5) of this impulse started from 9815 on 15 minutes chart.

Elliott wave counts of nifty for 28 Jul 2017

Elliott wave counts of nifty for 28 Jul 2017

This is 15 minutes time bar chart of Nifty covering bounce from 9815 which I am expecting as start of wave (5).

Here again, it seems wave (5) has been completed from 9815-10114 as an Impulse with extended inner wave (v).

And 38% retracement of this wave (5) is placed at 9999 which is immediate breakeven point. And we can expect further fall towards 9956-9859 if beak below this breakeven point.

Now, let’s separate look at the pattern of decline started from 10114 on lowest time frame chart to calculate immediate moves.

Elliott wave counts of nifty for 28 Jul 2017

Elliott wave counts of nifty for 28 Jul 2017

This is 5 minutes time bar chart of Nifty covering decline from all time high 10114.

The decline seems Impulsive with inner wave (1) completed from 10114-10052, wave (2) completed from 10052-10085 and wave (3) may be in progress from 10085.

And within wave (3), it seems inner wave (iii) completed at 10005 and wave (iv) or (v) may be in progress.

23%-38% retracement of wave (iii) of (3) is placed at 10023-10035. So, 10023-10035 is the range from where we can see a decline for low below 10005 again as wave (v).

And minimum 38%-61% projection for wave (v) of (3) [if wave (iii) already completed at 10023] is placed at 9992-9973 and next 100% projection is placed at 9943. So, 9992-9973 is minimum expected target range for downside which further can extend towards 9943.

After completion of wave (3) somewhere in 9992-9943 range, we can see small bounce [23%-38% retracement of wave (3) started from 10085)] to complete wave (4) followed by decline for new low to complete wave (5).

Conclusion

Nifty achieved upside target range 9998-10111 as expected some days back and the declined back by more than 100 points sharply. Now, Nifty has possibility to decline further towards 9956-9859 if I am right at identifying the pattern.

For short term, Nifty has possibility to decline further towards 9992-9943 and 10023-10035 is the range from where Nifty can decline. And 10035 is the breakeven point on upside above which we can expected further bounce for new high.

After achieving 9992-9943, Nifty can give small bounce [23%-38% retracement of wave (3) started from 10085)] to complete wave (4) followed by decline for new low to complete wave (5).

Trading Point of View:

Short term trading strategy must be “Sell on Rise” with 10035 as breakeven point. Stoploss can be placed at 10041 (some points above 10035).

Safe trading strategy is to Sell Nifty if get in 10023-10035 range with stoploss of 10041 expecting minimum downside target 9992-9943 which further can extend towards 9859.

If Nifty already opens gap down then any 23%-38% retracement of wave (3) [23%-38% retracement of move started from 10085] can be used to Sell Nifty using stoploss some points above 38% expecting targets for new low [Targets of 38%-61% of wave (5)].

Note: Breaking higher above 10035 can change the pattern. So, exit shorts and have fresh look at the pattern formed to initiate next trade.

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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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