Nifty Outlook and Trading Strategy for 20 Aug 2019 – Elliott Wave Analysis

| August 20, 2019

Nifty opened higher at 11094 and bounced further to register day’s high 11146 but declined back sharply by more than 100 points to register day’s low 11037 and closed 6 points up at 11053.

Yesyerday, 11034-11012 was immediate support and 11012 downside breakeven point and Nifty was expected to decline towards 11901-10837-10782 if breaks and stay below 11012 for more than 15 minutes, otherwise further bounce towards 11101-11142 was possible.

Trading strategy was selling on Rise whenever getting opportunity or buy suitable Put with stoploss abobe 11146. Nifty just touched stoploss 11143, regsitered high 11146 and declined back by 100 points. Live Updates with fresh outllok and fresh levels were sent to “Live Updates Subscribers”. 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 [5] 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 [iii] of [5] is completed at 11171 and [iv] may be completed at Irregular Correction at 10004 and wave [v] may be in progress. Wave [v] achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave [v] 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 [v] of [5] on daily chart.  Again there is no major change in wave counts on this chart.

The bounce from 10004-12103 is confirmed as (abc) move because of overlapping of waves after break below 10985. Now we have 02 possibilities on this chart.

  1. The (abc) bounce from 10004-12103 is inner wave [1] of Ending Diagonal Triangle for wave [v]. If this is the case then Nifty can decline towards 10585 to complete wave [2] of ED and later Nifty can bounce slowly with volatility for new high to complete wave [3], [4] and [5] of ED. Possibility of ED will get negated if Nifty breaks below 10004 (end of wave [1]).
  • The (abc) wave completed from 10004-12013 is wave (B) of Irregular Correction. If this is the case then Nifty can decline towards 10004 to complete wave (C) of Irregular Correction followed by new quick Bullish Rally for new high.

Now, we need to focus on pattern of decline after 12103 to calculate further probabilities.

After 12103, it seems wave (a or 1) completed from 12103-11625, wave (b or 2) completed from 11625-11981 as Double Zigzag Correction and wave (c or 3) may be in progress. Pattern of wave (a or 1) is not clear.

Within wave (c or 3), it seems inner wave (i) completed at 11461, (ii) completed at 11706 as Double Zigzag Correction, (iii) completed at 10782 , (iv) may be completed at 11181 and wave (v) may be in progress. Wave (v) needs to complete below 10782 [end of wave (iii)]

38% retracement of progress of wave (iii) of (c or 3) is placed at 11134 which is broken twice, but it is still the major upside breakeven point because a new wave for low below 10782 has been started.

Now we need to concentrate on internal pattern of bounce after 10782 to calculate immediate outlook and important levels.

Elliott Wave Analysis of Nifty on 15 Minutes Chart

This is 15 minute time bar chart of Nifty covering bounce low 10782 which I marked as start of wave (iv).

It seems a corrective pattern has been completed from 10782-11181 as Simple Zigzag Correction (abc) because it is 3 waves move from 10782-11181 and later waves are overlapped after break below 11018.

An upside corrective pattern started from 10782 and completed at 11181, so one more downside Impulse for low below 10782 is possible. Otherwise it is wave (v) in progress from 11181, wave (v) can extend even lower below 10782.

Within wave (v) started from 11181, it seems inner wave (A or 1) completed from 11181-10901 and wave (B or 2) may be completed from 10901-11146 and wave (C or 3) may be in progress.

Within wave (B or 2), 38% retracement of inner wave (c) is placed at 11061 which is downside breakeven point and same is already broken. So most probably, wave (B or 2) is already completed at 11146 and downward impulse for 10901-10782 has been started. Now, 11061-11078 is immediate resistance.

Conclusion

Overall, Nifty is in medium term negative zone with possibility of further decline towards 10585-10004 and 11134 is still the major upside breakeven point. We can think of any major upside reversal after break and close above 11134 only.

For Intraday/short term, immediate downside breakeven point 11061 is already broken. So most probably there is a reversal and Nifty can decline towards 10901-10782 in coming sessions. 11061-11078 is immediate resistnace and stoploss for any shorts can be placed 33-35 points above 11061.

We need to check pattern again if Nifty breaks and stay above 11078. We need to keep all these conditions in mind while planning next trade.

Trading Points of View:

Short term trading strategy is “Selling on Rise” expecting decline below 10782 in coming days whereas 10901-10837-10782 are step wise step targets.

11061-11078 is immediate resistance, so Selling can be done in 11061-11078 range using exact stoploss of 11095 expecting decline towards 10901-10837-10782. Same 11095 can be used as stoploss for existing shorts/Puts.

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We need to check pattern again if Stoploss of 11095 triggers.

Further, 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 to all my “Nifty Live Updates” subscribers.

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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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