Nifty Outlook for 31 May 2019 Based on Elliott Wave Analysis

| May 30, 2019

Nifty opened almost flat at 11865, registered low 11859 and bounce by more than 100 points to register day’s high 11967 and finally closed 84 points up at 11945.

Friday, Nifty was positive with 11864-11842 as short term support and minimum bounce towards 11967-12048 was expected. 11826 was downside Breakeven Point and any short term downside reversal was expected after break below 11826 only.

Nifty registered low 11859 and bounced to achieve minimum targets 11967. Further live updates with fresh support/Breakeven Point/Trailing Stoploss were sent during live market hours 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 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 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 ‘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 12041 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.  Again, there is no change in wave counts on this 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 10585-11856.

Wave (3) is less than 161%, thus not extended. So, wave (5) needs to be extended.

23%-38% retracement of wave (3) is placed at 11697-11484. So, 11697-11484 is major support and 11484 is major trend reversal point on downside. Nifty can bounce minimum 778-1258 points from 11697-11484 range but if it breaks and stay below 11484 can result in big decline towards 10585-10004 again.

Now, let’s have a separate look at progress of wave (4) on lowest possible time frame.

Elliott wave analysis of Nifty on daily chart

This is 15 minutes time bar chart of Nifty covering decline from all time high 12041 which I marked as start of wave (4) on daily chart. The decline from 12041-11614 is sharp and very last leg from 11859-11614 looks like a 3 waves (abc) move. So, we can’t ignore the possibility of Irregular Correction here.

It seems wave (a or 1) completed from 12041-11779, wave (b or 2) may be in progress as big Irregular correction with inner wave (a) completed from 11779-11859, irregular wave (b) completed from 11859-11614 and wave (c) may be in progress.

Within wave (c) of (b or 2), it seems inner wave (i), (ii), (iii) , (iv) is completed and (v) may be in progress from 11836.

Wave (v) achieved minimum 38% projection after touching 11967 whereas next 61% projection is placed at 12048 which may or may not be achieved.

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

Elliott wave analysis of Nifty on daily chart

This is 5 minutes time bar chart of Nifty covering bounce after 11836 which I marked as start of wave (v) on 15 minutes chart.

It seems inner wave [1], [2], [3], [4] is completed and wave [5] of (v) may be in progress from 11921. Minimum 38%-61% projection for wave [5] is placed at 11971-12002, so 11971-12002 is minimum targets range for completion of wave [5].

100% projection for wave [5] of (v) is placed at 12053 (not mentioned on chart) which is a rare case. So, we must be cautious at higher levels because Nifty can give a small or big correction without breaking higher above 12053.

Conclusion

Overall, Nifty is still in positive zone with 11917 as immediate downside breakeven point and one more bounce towards 11971-12002 can be expected.

But we need be cautious at higher levels because wave [5] of (v) is near to completion and Nifty can give a small or big correction without breaking higher above 12053.

On downside, Nifty if breaks below 11917 can result in further decline. Decline can be towards 11836 or towards major support 11614-11484, actual calculation can be done after seeing the pattern at the time of breakdown.

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

Trading Points of View:

Nifty bounced from low risk buying range 11864-11842 and achieved minimum targets 11967. Now, 11917 is immediate downside breakeven Point/Trailing stoploss for any existing longs expecting one more bounce towards 11971-12002.

We can think of selling after break below 11917 expecting 11836-11614-11484, but confirmation, entry levels and stoploss can be calculated after seeing the pattern at the time of breakdown only.

On the other hand, there are cautions for small or big decline at higher levels. Nifty can give a small or big decline before breaking high above 12053. Any updates on this condition will be given during live market hours through WhatsApp Broadcast.

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.

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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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