Nifty is Warning Cautions for Decline Towards 10585-10004

| May 10, 2019 | 0 Comments

Nifty opened lower at 11322 and traded between 11357-11255 range with repeated up-down swing. Finally, Nifty closed 57 points down at 11301.

Yesterday, Nifty was in negative zone with 11453-11519 as immediate resistance and 11519 as immediate upside breakeven point and one more decline of 170-250 points was possible. Any upside reversal was possible after break above 11519.

I just explained the conditions but didn’t suggest any exact trade in analysis report. Buying of 11400 Call of 16 May Expiry was advised by WhatsApp Broadcast message at 49-45 expecting target 80-100. Nifty bounced by more than 70 points after alert and Call bounced from 45-71 but didn’t achieve minimum target 80. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott wave analysis of Nifty on Daily Chart

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. This is the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at  Irregular Correction at 10004 and wave ‘5’ may be in progress. Minimum 38%-61% projection for wave 5 is placed at 11664-12689 but earlier high is 11760, so 11760-12689 is minimum target range for completion of wave 5. Wave 5 achieved minimum 11761 but pattern doesn’t seem completed.

So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.


Elliott wave analysis of Nifty on Daily Chart

This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart.

It seems an Impulse completed from 10004-10985 and same can be marked as wave (A or 1), there is Double Irregular Correction from 10985-10585 and same can be marked as wave (B or 2) and wave (C or 3) may be completed at 11856 or still in progress

38% retracement of progress of wave (C or 3) is placed at 11370 and same is already broken. 11370 was short/medium term breakeven point and is the deciding point from where Nifty can bounce for new life high or can start further decline towards 10585-10004. Nifty traded below 11370 for complete one session and warning cautions for decline towards 10585-10004 in coming days/weeks.

Now, let’s analyse the decline started from 11856 to check its pattern and internal wave counts.


Elliott wave analysis of Nifty on 30 Minutes Chart

This is 30 minutes time bar chart of Nifty covering decline after 11856 which I marked as end of wave (C or 3) on daily chart.

There is lots of confusion on this chart because of sharp move and repeated overlapping in between. I had to change the wave counts every next day on this chart. Pattern is again confusing but still I tried to mark most probable wave counts.

Now it seems, wave (a or 1) may be completed from 11856-11588, wave (b or 2) may be completed from 11588-11789 as irregular correction and wave (c or 3) may be in progress.

23%-38% retracement of progress of wave (c or 3) is placed at 11381-11458. So, 11381-11458 is short/medium term resistance and 11458 is major upside breakeven point. Nifty if breaks and stay above 11458 for a day can result in upside reversal otherwise cautions for further decline towards 10585-10004 are there.

Within wave (c or 3), it seems inner wave (i) completed from 11796-11625, (ii) may be completed from 11625-11789 as Double Zigzag Correction and wave (iii) may be in progress.

Within wave (iii), it seems inner wave [1] may be completed from 11789-11573, [2] may be completed from 11573-11656, [3] may be completed from 11656-11255 and wave [4] or [5] may be in progress.

Now, let’s have a separate look at progress of wave [3] on separate lowest time frame chart:


Elliott wave analysis of Nifty on 5 Minutes Chart

This is 5 minute time bar chart of Nifty covering decline after 11656 which I marked as start of wave [3] on 30 minutes chart.

It seems wave [3] already completed from 11656-11255 and wave [4] or [5] may be in progress. 23%-38% retracement for wave [4] is placed at 11349-11408. So, 11349-11408 is immediate resistance and Nifty already entered in this range.

Within wave [4], it seems wave [a] completed from 11255-11347, wave [b] completed from 11347-11291 and wave [c] may be in progress. 100%-123% projection of wave [c] is placed at 11383-11404. 123% projection of inner wave [c] of [4] is coinciding with 38% retracement for wave [4]. So, 11404-11408 can be assumed as good upside resistance.

But, if wave [4] is already completed at 11349 then further decline of minimum 200-300 points is possible (38%-61% projection for wave [5]).

Conclusion

For Short/Medium Term: – short/medium term breakeven point 11370 is broken today. 11370 is the deciding point from where Nifty can bounce for new life high or can start further decline towards 10585-10004. Nifty traded below 11370 for whole day and internal pattern also indicating further fall. So, overall conditions are warning cautions for decline towards 10585-10004 in coming days/weeks. 11381-11458 is major resistance and we can think of major reversal after break above 11458 only.

For Intraday/Very Short Term, So, 11383-11408 is immediate resistance and there is possibility of further decline of 200-300 points from the resistance range. 11458 is next resistance after 11408. There is no reasonable support as of now.

We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

Nifty traded below major breakeven point 11370 for whole day and internal pattern is also indicating further fall. So, overall conditions are warning cautions for decline towards 10585-10004 in coming days weeks.

So, our preference will be selling on every 23%-38% rise until we see any confident bullish pattern. 11383-11408-11458 is current resistance now, we will plan to sell in resistance range.

I will update about formation of any important internal pattern or any low risk trading opportunity during market hours by WhatsApp Broadcast.

The biggest event (Election Results) is on the cards and Nifty can give sudden/unexpected moves till 23 May 2019, waves may project/retrace abnormally. So, we need to be careful in trading for next 2 weeks.

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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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