Nifty Outlook for 23 Sep 2019 Onward – Elliott Wave Analysis

| September 22, 2019

Nifty opened higher at 10746 and declined by 50 points to register day’s low 10691 but bounced back sharply by huge 690 points to register day’s high 11381 and closed 569 points up at 11274.

Friday, 10752 was immediate upside breakeven/Trend Reversal point and Nifty was expected to give one more down leg of 83-133 points before breaking higher above 10752. But Nifty was expected to bounce further towards 10884 if breaks and trades above 10752 for more than 15 minutes.

Trading strategy was to Sell Nifty in 10732-10752 range using exact stoploss of 10765.35 expecting decline of 83-133 points. Nifty declined by 50 points from selling range after opening but bounced back sharply to trigger stoploss. Upside reversal was expected after break above 10752 but Nifty bounced so sharply that it didn’t give chance to buy after breakout above 10752. 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 counts 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 counts 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.  

The bounce from 10004-12103 is confirmed as (abc) 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)]. Nifty almost declined till 10585.
  2. 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 decline after 12103 to check if it is following the pattern of wave (2) of ED or the pattern of wave (C) of Irregular Correction.

After 12103, it seems wave (a or 1) completed from 12103-11625, wave (b or 2) completed from 11625-11981 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. But there are abnormalities in the pattern after 10782, so we will see it separately on lower time frame.  

38% retracement of progress of wave (c or 3) is placed at 11247 which is already broken. So, we need to concentrate on internal pattern now.

So, let me explain the abnormalities within the move after 10782 on Hourly Time Frame chart.

Elliott wave counts of Nifty on Hourly Chart

This is hourly time bar chart of Nifty covering move after 10782 which I marked as start of wave (iv) on daily chart.

The bounce from 10782-11181 is Simple Zigzag (abc) move, thus meeting the requirement of wave (iv). But if wave assume wave (iv) completed at 11181 then wave (v) from 11181-10670 doesn’t look like Impulse or Ending Diagonal Triangle, thus pattern of wave (v) doesn’t seems completed.

The move from 10782-11181-10637 doesn’t look like wave (iv) and (v), so we need to ignore this move for time being and need to concentrate on bounce after 10637 to calculate further outlook.

After 10637, it seems wave [a or 1] completed from 10637-11141, wave [b or 2] completed from 11141-10670 and wave [c or ] may be either completed from 10670-11381 or still in progress.

23%-38% retracement of wave (c or 3) is placed at 11213-11109. So, 11213-11109 is immediate support and 11109 is immediate downside breakeven point. Nifty if breaks and stay below 11109 can result in further decline towards 10670-10637. Otherwise one more bounce of 271-439 points can be there if Nifty fails to break below 11109.

Lack of Confidence in Bigger Upside reversal: 11181 is Reflex point in this case but first impulse from low (10637-11141) completed below Reflex Point. So, even if the bounce is sharp and strong, we can’t ignore the possibility for decline below 10637 again.

Now, let’s have a separate look at progress of wave [c or 3]on lowest possible time frame.

Elliott wave counts of Nifty on daily Chart

This is 5 minute time bar chart of Nifty covering bounce after 10670 which I marked as start of wave [c or 3] on hourly chart.

It seems an Impulse is already completed from 10670-10381 as I marked on chart but the bounce is very sharp, so there is always lack of confidence in inner wave counts when move is so big and sharp.

But no matter if [c or 3] is already completed or still in progress, 11213-11109 will be support in both the cases.

Conclusion

Overall, Nifty bounced more than 600 point on Friday and broke all the upside breakeven points in just a best shot. Fibonacci wise, Nifty is in positive zone as it closed above major breakeven point 11247 but some abnormalities at bottom left a Question Mark. Uncompleted Pattern of wave (v) at bottom and Reflex Point is not giving clear confidence for bigger upside reversal, so we can’t ignore the possibility of declining below 10637 again.

We have both Bullish and Bearish Possibilities within overall pattern, so we will concentrate on internal pattern to calculate immediate outlook step by step.

For Intraday/short term, 11213-11109 is immediate support and 11109 is immediate downside breakeven point. Nifty if breaks and stay below 11109 for 15 minutes can result in further decline towards 10670-10637. Otherwise one more bounce of 271-439 points can be there if Nifty fails to break below 11109.

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

Trading Points of View:

CLICK HERE for more details..

We have both Bullish and Bearish possibilities in overall pattern. So, we can’t decide any big positional trade as long as any one sided move is not clear.

For very short term/Intraday trade, 11213-11109 is immediate support. Either we can Buy with stoploss below 11109 or we can sell after break and stay below 11109 for more than 15 minutes. Support range is very big, so we can’t decide any confident trade in advance because stoploss will be big.

We can decide any confident trade during market hours only after analysing the pattern of decline in 11213-11109 range. Any low risk trading opportunity if we find during Live Market Hours will be updated to “Live Update Subscribers”. But we can’t decide any confident trade in advance because move is very big.

Otherwise, traders can plan their own trade based on the conditions and levels explained in conclusion.

Further, I will update about the 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.

Tags: , ,

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"

Comments are closed.