Nifty Outlook and Trading Strategy for 18 Jun 2019 Onward

| June 17, 2019

Nifty opened higher at 11844 but decline sharply just after opening and traded with negative bias for whole session. Nifty declined by more than 170 points to register low 11657 and closed 151 points down at 11672.

Yesterday, Nifty was in negative zone and further decline towards 11769-11747-11703 was expected. 11827 was immediate breakeven point but 11877-11930 was again major resistance.

Trading strategy was “Selling on Rise” near resistance/breakeven point and avoid buying as long as Nifty trading below 12000. Nifty opened higher at 11844 but it was just a flash low and Nifty was below 11800 within fraction after opening and then declined till 11657. Further live updates were sent during live market hours through WhatsApp.  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. There is no major 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. Wave ‘5’ achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave 5 achieved 12103 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.  Nifty broke below 11769, so there is change in wave counts.

It seems, inner wave (1) of 5 completed from 10004-10985, wave (2) may be completed from 10985-10585 Double Irregular Correction and wave (3) may be completed from 10585-12103 and wave (4) may be in progress.

23%-38% retracement of wave (3) is placed at 11744-11523. So 11744-11523 is major support and 11523 is major downside breakeven/trend reversal point.

Wave (3) is less than 161% (not extended), so wave (5) needs to be extended (project more than 61%). Minimum 61% projection for wave (5) would be 1297 points.

Overall, 11523 is major trend reversal point. Nifty can bounce by 1297 points without breaking below 11523 but if it manages to break and stay below 11523 for complete sessions can turn the major pattern into Irregular Correction and can result in further fall towards 10585-10004.

Now, let’s have a separate look at progress of wave (4) started from 12103 on separate lowest possible time frame to check its pattern.

Elliott Wave analysis of Nifty on 15 Minutes Chart

This is 15 minutes time bar chart of Nifty covering bounce after all time high 12103 which I marked as start of wave (4) on daily chart.

It seems wave (a or 1) completed from 12103-11769, wave (b or 2) may be completed from 11769-12000 and wave (c or 3) may be in progress.

Within wave (c or 3), it seems inner wave (i) completed from 12000-11817, (ii) may be completed from 11817-11930 and wave (iii) may be in progress.

23%-38% retracement of progress of wave (iii) is placed at 11721-11761. So, 11721-11761 is immediate resistance and 11761 is immediate upside breakeven point. Nifty can give one more down wave of minimum 132-222 points from resistance 11721-11761.

But Nifty if manage to break above 11761 can result in further bounce towards 11877-11930.

Within wave (iii), it seems inner wave [1], [2] is completed and [3] or [4] may be in progress. It is just inner wave [3] of (iii) of (c or 3) in progress, so fall can extended reasonably lower from present levels.

Conclusion

Medium term outlook is at the edge now. 11523 is major trend reversal point. Nifty can either bounce by 1297 points without breaking below 11523 but if it manages to break and stay below 11523 for complete sessions can turn the major pattern into Irregular Correction and can result in further fall towards 10585-10004.

Internal Pattern is indicating the possibility of further fall, even 11523 can be broken. So, we need to concentrate on internal wave pattern for outlook and trading.

For short term/Intraday, 11721-11761 is immediate resistance and 11761 is immediate upside breakeven point. Nifty can give one more down wave of minimum 132-222 points from resistance 11721-11761.

But Nifty if manage to break above 11761 can result in further bounce towards 11877-11930.

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

Trading Points of View:

Sentiments are still weak and one more down wave of minimum 132-222 points can be expected. 11721-11761 is immediate upside resistance and 11761 is upside breakeven point

So, overall trading strategy would be “Selling on Rise” with 11721-11761 as low risk selling range and 11761 as trend reversal/stoploss expecting decline of 132-222 points. Breaking below 11523 can trigger even bigger fall.

We can think of any buying after break above 11761 only.

Otherwise, I will update about formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast.

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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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