Nifty Updates and Elliott Wave Analysis for 24 Jun 2015

| June 24, 2015

Nifty opened Gap up and gave a down jerk of 50 points just after opening to touch the low of 8334 but recovered immediately to touch day’s high of 8398 followed by range bound consolidation with 8350-8390 range for rest of the day. It is 8th session Nifty closed green after low of 7940. Let’s have a look on latest charts.

Nifty Elliott Wave Counts for 24 June 2015

Nifty Elliott Wave Counts for 24 June 2015

As I mentioned in my yesterday’s report, this is 15 minutes time bar chart of Nifty showing move after Friday’s low 7940. It seems wave (1) completed from 7940-8034, wave (2) is completed from 8034-7952 as Irregular Correction and (3) is in progress or already completed.

The inner waves of move after wave 2 are very difficult to identify but move is straight without any reasonable correction with frequent gaps, which is the personality of wave 3. So, may be wave 3 is still in progress. And we can see 23%-38% correction after completion of wave 3.

Completion of wave 3 can only be assumed after seeing a reasonable correction in corrective pattern. And as I mentioned in “Personalities of wave 3”, we should not try to catch the top of wave 3 and must trade it with trailing stop loss.

Stop loss for existing/positional longs must be 8227 which is 38% retracement of wave 3 till now.

Conclusion:

Nifty bounced more than 450 points in last 8 sessions without any reasonable correction but still there is no sign of reversal. Nifty has shown the decline of about 50 points but structure is not showing any simple corrective pattern. So there may be one more high.

Main trend is still up as there is no sign of reversal yet and stop loss for existing/positional longs must be 8227 which is 38% retracement of wave 3 as we rarely see wave 4 retracing more than 38% of extended wave 3. Any big positions must be reduced and hold rest as trailing stop loss is 8227 which is almost 160 points from CMP. Selling must be avoided and Dips near stop loss can be used as buy.

Answer to Queries:

I got questions that why I am not giving Stop loss for Selling?

I am not giving any stop loss for selling because I am unable to find any condition for selling. From last 7-8 session I am only suggesting “Buying on Dips” strategy and suggesting trailing stop loss for existing longs every day.

“BUY on DIPS” means, selling in hope of small declines must be avoided but if we see any dip near to our stop loss should be used as buy.  So, there is no point of giving Selling Stop loss as I am not seeing any sign of reversal.  We must go with the trend till it favors.

Is there any chance that the bigger wave 4 is completed at 7940 and new bull rally has started?

Yes, possibilities are always there but there is no clear sign yet. And we can never confirm definitely that it is competed or not till we see any clear pattern. And we should not be bothered about so big rallies and targets.

We identified the small or big reversal in 7958-7900 range on 12 June 2015 where we expected a small or big reversal and we are riding that bounce with trailing stop loss till now which is not triggered yet, neither we seen an reversal. So, if this bounce is a new bull rally than we are already with it, otherwise our trailing stop loss will hit.

Important Point to remember: We can never make money from this market if we wait for 100% confirmation. Nothing is 100% confirm in stock market. We must take small risks with small stop loss when we are seeing reversals or high rewards and ride the trade with trailing stop loss. Sometimes our small stop loss hits, sometimes we exit at cost to cost or with small profit when trailing stop loss triggers and sometimes we hit a jackpot. Finally, the result will be overall profit if we trade with consistency and discipline. There is no holy grail and money can be made with consistent series of trades not with 1 or 2 trades.

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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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