Nifty Seems Sell On Rise Till Aug 2015 Expiry – Elliott Wave Analysis on 18 Aug 2015

| August 18, 2015

Nifty opened gap up today at 8505 and bounced till 8525 in morning but failed to sustain at higher levels and declined sharply by 90 points to register day’s low of 8434 followed by upside consolidation before closing 10 points lower at 8466.

Yesterday I suggested selling Nifty till 8493 using stoploss of 8516 but Nifty opened well above 8493 and also triggered stoploss of 8516. But, I also mentioned that strategy would be to sell on Rise only and advised to avoid buying Nifty even if it breaks above 8516. Market is bit tough from last 02 weeks. It is bit easy to calculate stoploss during live market hours but very tough to calculate before market opens.

Let’s have a look on move after June 2015 low 7940. To know the explained counts on same chart, read my previous Elliott wave analysis report Nifty can Correct to 8321-8180 in Coming Sessions – EW Analysis for 17 – 28 Aug 2015.

Nifty Elliott Wave counts on hourly chart

Nifty Elliott Wave counts on hourly chart

This is hourly chart of Nifty covering move after 2015 low 7940. It seems an impulse completed from 7940 to 8655 followed by start of corrective decline which can retrace the whole impulse by 38%-61%. Nifty already achieved 38% after breaking 8381 whereas 61% is placed at 8213 which may or may not be achieved.

Within this corrective decline after 8655, wave (A) seems completed from 8655-8321, wave (B) completed from 8321-8621 and (C ) is in progress from 8621 which needs to go below 8321 at least whereas 100% and 123% is placed at 8287 and 8213.

The counts I have shown may prove wrong but I am not able to identify any other probable counts.

Overall, conditions are not confident and favorable for any positional longs as there are possibilities for a decline till 8321 -8180 again without going much higher above 8530.

Let’s have a look at closing pattern on 5 minutes chart.

Nifty Elliott Wave counts on 5 minutes chart

Nifty Elliott Wave counts on 5 minutes chart

This is 5 minutes time bar chart of Nifty covering Intraday move of 18 Aug 2015. Today again the setup on chart looks a like perfect bearish pattern both by structure and calculations but behavior of Nifty in last 2-3 days has lowered my confidence.

By casual look, the decline from 8525-8434 seems impulsive followed by 3 wave’s bounce which almost retraced this downward impulse by 61%. 61% is placed at 8490 where Nifty bounced till 8487.

If we see the bounce from low 8434, the move is clearly 3 wave’s (simple zigzag) where 2nd upside wave projected almost 123% of 1st upside wave. Thus, Structure of pattern and calculations are perfectly matching the conditions of ABC (Simple Zigzag) correction.

The upside pattern from 8434-8487 can never be 1, 2 and 3 as decline after 3 (8487) overlapped wave 2 which is not possible within impulse. This pattern can be either (ABC) simple Zigzag OR waves 1, 2 and (i) of 3 where inner wave (i) of 3 is bigger than 1(Nifty can give great upside move in this case). OR it can be progress of any Complex Correction.

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Conclusion:

By analyzing all conditions on charts, still conditions are not favorable for any great upside where as decline below 8321 is possible in coming days. Waves can be volatile and trick as expiry is near.

A confident stoploss can be calculated only after opening during live market hours as moves are confusing but Buying or Long position should be avoided and any rise can be used as short selling  with small stoploss till expiry or till we find any confident clear bullish pattern.

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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"