Nifty Likely to be Bullish or Hold above 8476 till July 2016 Expiry

| July 26, 2016

Nifty opened lower at 8519 but bounced just after opening and traded with strength for rest of the day. Nifty bounced gradually for whole day to register day’s high 8641 before closing 94 points up at 8635.

Yesterday, I mentioned 8513 as stoploss for existing longs (Taken on Friday at 8526) expecting minimum targets 8598-8623 and further manage trade with stoploss of 38% retracement of wave (3) started from 8489. Nifty opened gap down but bounced back from 8517 sharply carrying the personalities of wave (3), achieved minimum targets range 8598-8623 and still trading above 38% retracement of wave (3). Let’s have a fresh look at latest charts for further scenario.

Today I am covering move from 08 July 2016 low 8287 and previous waves counts are explained in my previous report Elliott Wave Outlook of Nifty for 22 July 2016 Onward

Nifty Elliott Wave analysis for July 2016 Expiry

Nifty Elliott Wave analysis for July 2016 Expiry

This is 30 minutes time bar chart of Nifty covering bounce from 08 July low 8287 which I am assuming as progress of wave (5) till now.

It seems impulse started from 8287 where wave (4) is completed at 8476 as Simple Zigzag and wave (5) is in progress. Minimum 38% projection for wave (5) is already achieved after break above 8594 whereas next 61% is placed at 8665. Wave (5) will be in extended zone after break above 8665.

The pattern formed at top is indicating bullish scenario or holding higher levels for some more days. Let me explained the conditions:

  1. If the bounce started from 8476 is wave (i), (ii) and progress of (iii) then Nifty likely to move higher as wave (iii) and (v) still needs to complete upwards. This condition I am expecting as of now and will carry move with trailing stoploss.
  1. If the bounce from 8476 is (a), (b) and progress of (c) then there will possibilities: –
  • Either this (abc) wave started from 8476 may be inner wave (i) of Ending Diagonal Triangle and it may take some more days to complete whole ED at higher levels
  • Or this (abc) bounce can turns into “Irregular” wave (B) and make Irregular Correction. Nifty can decline sharply towards 8476 in this case but followed by a bounce for new high again.

So, all the conditions are indicating bullishness or holding above 8476 in coming sessions and we need to carry this move with trailing stoploss. I explained all the conditions just to make learners understand about different possibilities in different conditions so that you can think of next if one is negated.

So, we need to look at bounce from 19 July 2016 low 8476 to conclude further short term scenario and to prepare next trading plan.

Nifty Elliott Wave analysis for July 2016 Expiry

Nifty Elliott Wave analysis for July 2016 Expiry

This is 5 minutes time bar chart of Nifty covering bounce from 19 July 2016 low 8476 which I am expecting as start of wave (5) on first 30 minutes chart.

It seems wave (i) completed from 8476-8585, wave (ii) completed from 8585-8489 and wave (iii) in progress from 8489. And within wave (iii), it seems inner wave (3) in progress as explained on chart.

Wave (iii) achieved minimum 100% projection after break above 8589 and next 161% is placed at 8665. Wave (iii) can be highly extended. 38% retracement of whole wave (iii) is progresses till now is placed at 8582 which is the point below which we can think of any reversal and below which must be stoploss for existing/fresh longs.

Conclusion:

Nifty achieved new high above 8594 as we expected and we succeeded to catch and trade this upside perfectly with 20-25 points stoploss. Now, Nifty likely to be positive or hold above 8476 for some more days based on the conditions explained above.

For trading point of view, trailing stoploss for existing or fresh longs (taken Friday after touch of 8526) must be 8577 (5 points below 38% retracement 8582) to carry the trade for more upside towards 8665 and above. We must carry the longs with trailing stoploss of 38% retracement of wave (iii) started from 8489 to gain maximum if it is really wave (iii).

Even any decline towards 8605-8582 can be bough again with same stoploss of 8577 expecting minimum targets 8641-8665. Longs to be exit and need to look at the pattern again if Nifty breaks below 8577.

Trade in light quantity as per risk tolerance and follow strict stoploss to avoid heavy losses if we prove wrong in analysis.

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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"