Nifty Outlook and Trading Strategy for 29 Jul 2019

| July 29, 2019

Nifty opened lower at 11247 and declined further to register day’s low 11210 but bounced back by more than 90 points to register day’s high 11307 before closing 32 points up at 11284.

Friday, I didn’t send complete analysis report but sent analysed chart with outlook. Nifty was expected to decline towards 11192-11152 and 11309-11330 was immediate resistance.

Trading strategy was to sell Nifty if get in 11309-11330 range using exact stoploss 11341 expecting decline towards 11192-11152. Nifty bounce till 11307 and declined by 50 points but without entering in exact selling range 11309-11330. 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 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.  

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 and Nifty entered in medium term negative zone with possibility of further decline towards 10585-10004 but the pattern of decline from all time 12103 is still corrective till now.

Generally, Nifty is in short/medium term negative zone but still we need to concentrate on the internal pattern of decline started from 12103 to calculate immediate move.

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

Elliott wave analysis of Nifty on hourly chart

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. There is slight change in wave counts.

Earlier I was marking this decline as Triple Zigzag and now it looks like Double Zigzag with first (abc) cycle completed from 12103-11625, wave (X) may be completed from 11625-11981 and 2nd (abc) cycle may be in progress from 11981.

2nd (abc) cycle started from 11981 is bigger and sharp then previous waves, so I am taking alternate counts here. It seems wave (a or 1) completed from 11981-11461, wave (b or 2) may be completed from 11461-11706 and wave (c or 3) may be in progress. Normal 100% projection for wave (c or 3) is placed at 11186.

Within wave (c or 3), it seems inner wave (i), (ii), (iii), (iv) is completed and (v) may be in progress. Wave (v) achieved minimum 38% projection after break below 11244 whereas next 61% projection is placed at 11148 which may or may not be achieved.

38% retracement of progress of wave (iii) is placed at 11455. So, 11455 is still the short term upside breakeven point. Any upside reversal can be expected after break above 11455 otherwise Nifty is in negative zone.

Now, let’s have a separate look at progress of last wave (v) of (c or 3) started from 11398  on lowest possible time frame.

Elliott wave analysis of Nifty on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering decline after 11398 which I marked as start of wave (v) on hourly chart.

The decline from 11398-11229 looks like 3 waves (abc) move, the bounce from 11229-11361 is corrective and Nifty declined again to register new low below 11229.

Overall, the pattern of decline looks like a progress of Ending Diagonal Triangle with inner wave [1] completed from 11398-11229, [2] completed from 11229-11361 and wave [3] may be in progress.

Normal 100%-123% projection for wave [3] is placed at 11192-11152 and same is the minimum target range for completion of wave [3].

Within wave [3], it seems inner wave (a) completed from 11360-11210 (pattern is not clear) and wave (b) may be in progress. Within wave (b) it seems inner wave [a] completed from 11210-11267, [b] completed from 11267-11215 and [c] may be in progress.

With wave [c], it seems inner wave (i), (ii), (iii), (iv) is completed and (v) may be in progress. 38% projection for wave (v) falls below 11307 and next 61%-100% projection for wave (v) is placed at 11313-11349.

So, 11307-11313 is minimum target range for completion of wave [c] but 11349 is a rare possibility.

Conclusion

Overall, major trend reversal point 11523 is broken and Nifty is in medium term negative with possibility of further decline towards 10585-10004  but the pattern of decline after 12103 still seems corrective. So, need to concentrate on internal pattern of decline after 12103 to calculate further moves.

For short term, Nifty is still in negative zone with 11455 as short term upside breakeven point. We can think of any upside reversal after break below 11455 only.

For Intraday, Nifty has possibility to decline towards 11192-11152 with 11307-11349 as immediate resistance. So, Nifty can decline towards 11192-11152 without breaking higher at 11349.

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

Trading Points of View:

Nifty broke major trend reversal point 11523 and entered in medium term negative zone and is also trading below upside breakeven point 11455, so short term trading strategy must be “Selling on Rise” as long as trading below 11455 whenever getting opportunity with small stoploss.

For Intraday, trading strategy would be Selling Nifty if get in 11313-11349 range using exact stoploss of 11351 expecting decline towards 11192-11152.

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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