Nifty may show Smart Recovery in Coming Sessions – EW Analysis for 25 Aug

| August 25, 2015

This is same Elliott Wave Analysis Report of Nifty which I sent to my subscribers on evening 24 Aug 2015. I didn’t planned to post my analysis reports on my blog this week but posting just because of 530 (6%) fall in Nifty yesterday as most of the traders are curious to know what I am feeling about market.

Nifty opened huge gap down today at 8055 and crashed sharply below 8000 within minutes after opening and surrendered thereafter. Nifty crashed 530 points from previous close which is the highest fall after 2008 crash. These types of crashes are not normal and no one can predict in reality.

I was expecting 8106 at least but Nifty opened well below those levels. I was expecting levels below 7940 in near term but not in this way but that is what we called stock market. It is good for us that we were on short side and we are safe even if we booked profit in 8055-8000 range. It was a new experience; now let’s see what charts are saying.

Nifty Elliott Wave Counts on 25 Aug 2015

Nifty Elliott Wave Counts on 25 Aug 2015

This is daily time bar chart of Nifty covering move after 2015 high 9117. Previously I was expecting it as triple zigzag which is still possible but I don’t want to give any comment on that at present. Possibilities of Complex correction are there till lower line is safe and this lower line is too far and it is not safe to consider it.

Calculation wise, after a move from 9117-7940, Nifty bounced near to 61% till 8655 and fell again with a crash and steep wave of 530 points. This fall had achieved more than 61% of previous fall whereas 100% is placed at 7478. Keep this chart here only and let’s move on fall from 8655.

Nifty Elliott Wave Counts on 25 Aug 2015

Nifty Elliott Wave Counts on 25 Aug 2015

This is 30 minutes time bar chart of Nifty covering move after July 2015 high 8655. The move from 8655-8321-8621 can be waves (A or 1) or (B or 2) and (C or 3) may be started from 8621.

Within wave (C or 3), wave (1) and (2) are completed at shown on charts and (3) seems to be near completion. Wave (3) is already extended after breaking 161% at 8017 whereas 261% is placed at 7700. We can see a bounce of 23%-38% after completion of wave (3) but it is difficult to calculate end of wave (3) because of steepness and all the inner waves are highly extended.

It is not wise to see 5 minutes chart as its will be confusing to see 500 points move on 5 minutes chart. Read the conclusion carefully.

Conclusion:

I started analyzing stock market with Elliott Wave Theory in 2010 and it is the first time I have seen more than 500 points fall in Nifty in a Single day ( I seen a bounce when PM Modi won elections). So, this is new experience and some hesitations for me at present.

The crash was there but it followed all EWT rules. We have seen the power of wave (3) on bigger time frame today. Nifty crashed more 850 points in last 3 sessions.

Now, safe traders must wait with their money in hand for a good trading opportunity and let the market settle as we can never set stoploss in these conditions. Control your emotions and sit calm as we are going to get a good Buying opportunity soon. Have patience as market is here only and it is just a matter of day or two for things to be settles but never lose your money unnecessarily.  Money saved is money earned.

Wait till we see a reasonable bounce of 23% which most probably we might see in next 1-2 sessions and later we can see smart recovery in short term. But wait now and let we see a low risk opportunity with exact stoploss.

Big traders can Buy Nifty in very light quantity only if you see Nifty trading above tomorrow’s opening price after 12:30PM using stoploss of day’s low. Remember, trade in light quantity and with strict stoploss of day’s low registered till 12:30 PM and it is only for risky traders. You can expect a bounce of minimum 23% from lows.

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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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