Nifty Outlook and Trading Strategy for 22 Jul 2019 – Elliott Wave Analysis

| July 21, 2019

Nifty opened higher at 11627, bounced further to register day’s high 11640 but declined back sharply by 240 points to register day’s low 11399 and closed 177 points down at 11419.

Yesterday, 11611-11639 was immediate resistance and Nifty was expected to decline further towards 11532-11461 without breaking higher above 11639.

Short term trading strategy was to Sell Nifty on bounce till 11639 with exact stoploss of 11641 expecting decline towards 11532-11461. Nifty registered high 11640 and declined by 240 points till 11399, regular live updates were sent through WhatsApp Broadcast. 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 for 22 Jul 2019

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 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 for 22 Jul 2019

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, 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.

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.

Wave (3) retraced by more than 38% after breaking below 11523. Thus, major downside breakeven point 11523 is broken but the pattern of decline from all time 12103 is still corrective till now. So, we need to ignore this breakeven point for time being and need to concentrate on the internal pattern of decline started from 12103.

So, let’s have a separate look at decline started from 12103 to check its pattern.

Elliott Wave Analysis of Nifty for 22 Jul 2019

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

The overall decline looks like a Double/Triple Zigzag correction with first (abc) cycle completed from 12013-11769, wave (X1) completed from 11769-12000, 2nd (abc) cycle completed from 12000-11625, wave (X2) completed from 11625-11981 as Double Zigzag Correction but last (abc) cycle is started from 11981 is creating confusion.

Last (abc) cycle is sharp and big as compared to earlier (abc) cycles and it looks like any Impulse rather than (abc) till now. So, we need to ignore previous move for time being and need to concentrate on last decline started from 11981.

From 11981, it seems inner wave (i), (ii), (iii), (iv) is completed and (v) may be in progress. Wave (v) achieved its minimum requirement after breaking below 11461 whereas next 61%-100% projection is placed at 11384-11186, 100% projection 11186 is a rare for wave (v).

Now, let’s have a separate look at progress of wave (v) on separate lowest possible time frame.

Elliott Wave Analysis of Nifty for 22 Jul 2019

This is 5 minute time bar chart of Nifty covering decline after 11706 which I marked as start of wave (v) on hourly chart.

It seems inner wave [1] completed from 11640-11582, [2] may be completed from 11582-11640 and wave [3] may be already completed from 11640-11399 or still in progress.

23%-38% retracement of progress of wave [3] is placed at 11455-11491. I am not confident if counts of wave [1] and [2] are correct so I am also calculation 38% retracement of whole decline and same is placed at 11516.

So, overall 11455-11491 is immediate resistance but 11516 is immediate upside breakeven point. Nifty can show one more down wave for new low without breaking above 11516. We can think of any big upside reversal after break above 11516 only.

Conclusion

Overall, 11523 is major trend reversal point and Nifty closed below it the pattern is decline after 12103 still seems corrective. So, we need to ignore this breakeven point for time being and need to concentrate on internal pattern of decline after 12103.

For short term/Intraday, Nifty is still in negative zone. 11455-11491 is immediate resistance but 11516 is immediate upside breakeven point. Nifty can show one more down wave for new low without breaking above 11516. We can think of any big upside reversal after break above 11516 only.

On downside, 11186 is downside support, Nifty can give a small or big bounce before breaking lower below 11186.

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

Trading Points of View:

Nifty broke major trend reversal point 11523 but pattern of decline still seems corrective, so we can’t decide any trade based on this breakeven point yet.

For Intraday or Very Short Term, resistance is 11455-11491 and breakeven point is 11516. Overall 11455-11516 range is big for selling. For better risk/reward, Nifty can be sold if get in 11490-11516 range using exact stoploss of 11525 (just above 11516 and earlier downside breakeven 11523) expecting decline below 11399 again.

We can think of buying after Nifty staying above 11516 for 15 minutes.

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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