Nifty Outlook and Trading Strategy Near April 2018 Expiry

| April 24, 2018

Nifty opened almost flat at 10578 and traded with positive bias for rest of the day. Nifty traded in 10569-10636 range and closed 29 points up at 10614.

Yesterday, short term outlook was bullish with 10509-10409 as short term support range with the possibility of decline towards this support range.

Trading strategy was to buy Nifty calls of May Expiry if get in 10509-10409 range or Buy Nifty for Intraday if “breaks above 10591 without breaking below 10568” with stoploss of 10567. Nifty breaks above 10591 and then bounced further to register day’s high 10636 without breaking below 10568, trade gave 40-45 points profit. Now, let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from after 9951 and this analysis report further update on my yesterday’s analysis report Elliott Wave Analysis Report of Nifty for April 2018 Expiry Week

 

Elliott wave counts of nifty on hourly chart

Elliott wave counts of nifty on hourly chart

This is 1 Hour time bar chart of Nifty covering bounce after low 9951 which I am analyzing independently. This is again the same chart with explanation which I had explained in my last analysis report because there is no change in wave counts on this chart.

Again, there is no change in wave counts on this chart. It seems wave (A or 1) completed from 9951-10229, wave (B or 2) completed from 10229-10111 as Irregular Correction and wave (C or 3) may be completed from 10111-10594 or still in progress.

Within wave (C or 3), it seems inner wave (iii) completed at 10519, (iv) completed at 10396 and (v) may be completed at 10594 or still in progress. Wave (v) already achieved minimum 38% projection after breaking above 10551 and next 61% projection is placed at 10648 which may or may not be achieved.

There is small correction from 10594 to 10509 and pattern of later bounce after 10509 is 3 wave’s move and pattern not completed yet. There is still a possibility if Irregular Correction at top started from 10594, so we must calculate retracement with respect to 10594.

So, 23%-38% retracement of progress of wave (C or 3) is placed at 10480-10409 (calculated with respect to 10594). So, 10480-10409 is still short term support on downside and 10409 is breakeven point below which we can expect further decline.

Let’s have a separate look at decline from 10594 on lowest time frame to calculate immediate levels.

Elliott wave analysis of nifty on 15 minute chart

Elliott wave analysis of nifty on 15 minute chart

This is 15 minute time Bar chart of Nifty covering decline from high 10594 which I am expecting as the start of small or big correction after completion of wave (C or 3).

The decline from 10594-10509 is very sharp which generally looks like a 3 wave’s move I marked as wave (a), (b) and (c).

Later bounce after 10509 is also a 3 wave’s move till now which I marked as wave (A or 1) from 10509-10568, (B or 2) from 10568-10527 and wave (C or 3) may be in progress from 10527.

Within wave (C or 3), it seems inner wave (i), (ii), (iii), (iv) is completed and (v) may be in progress. Minimum 38%-61% projection for wave (v) is placed at 10611-10637. But end of wave (iii) is 10638 and next 100% projection is placed at 10680. So, 10638-10680 is minimum target range for completion of wave (C or 3).

End of wave (A or 1) is 10568 which is breakeven point. Breaking below 10568 can turn the whole pattern started after 10594 into Irregular Correction (3-3-5 pattern). And this Irregular Correction can complete somewhere between 10509-10409 followed by bounce above 10638 again.

Conclusion

There is no major change in overall Long Term and Short Term Outlook: –

For long term, Nifty is still bullish and has long way to go as explained in my last “All Time Frames” report but we are not sure if bottom is already made or still pending. Nifty can bounce from present levels also and Maximum estimated bottom range is 9800-9600 based on Fibonacci retracements.

For short term, 10480-10409 is still immediate support range on downside with 10409 as short term breakeven point. We can think of any bigger reversal after breaking below 10409 only.

**10568 is immediate breakeven point on downside and breaking below 10568 can form Irregular Correction pattern at top. If it happens then this Irregular Correction needs to complete somewhere in 10509-10409 range. So, this condition is indicating 10509-10409 as good support range for sharp bounce towards 10638. This condition will activate only if Nifty breaks below 10568 without completing the impulse started from 10509.

10637-10680 is immediate resistance on upside from where a small or big correction is expected. If this correction breaks below 10568 then decline can extend further towards support range 10509-10409.

Combination of overall patterns is indicating some range bound consolidation at top with 10568 as breakeven point and 10638-10680 as resistance range on upside.

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

Trading Points of View:

Keeping all the conditions in mind: –

  1. Any existing longs must be exited in 10638-10680 range and wait for next opportunity for longs.
  2. Nifty if get in 10660-10680 range then light intraday shorts can be initiated using stoploss of 10687 (some points above 10680). Try to book/protect whenever getting 35-70 points profit and hold for next day only if breaks below 10568.
  3. Nifty if declines sharply in 10480-10409 range then strategic longs can be planned in 10480-10409 range using stoploss some points below 10409. Safe traders can buy suitable May Expiry Calls rather than futures because stoploss is big.

BANK NIFTY ANALYSIS

“Elliott Wave Analysis Reports of Bank Nifty” with “Bank Nifty Weekly Options Trading Strategies” Daily is also provided by one of my personally trained student Vinod Sharma on his website http://www.ewanalyst.com/ Links to some of his analysis Reports are: –

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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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