Nifty Warning Correction from 8415-8446 Range – EW Analysis Report

| November 16, 2014

Nifty open flat on Friday and traded whole day with positive bias but with some sudden downward jerks in between and achieved my minimum expected levels of 8398. Nifty is going exactly as per my expectations from last 4-5 sessions and progressing in Ending Diagonal Pattern which is just about to complete in very next sessions.  Before seeing the progress of ED lets us check where Nifty is in medium term pattern.  You can see long term analysis and wave counts at Elliott Wave Analysis of Nifty for All time Frames Dated 18 Oct 2014

EW Analysis of Nifty for 17 Nov (Chart 1)

EW Analysis of Nifty for 17 Nov (Chart 1)

This is daily time bar chart of Nifty covering move after July low of 7118. As I mentioned in my long term report, Nifty is progressing as Ending Diagonal where wave (4) was completed at 7724 and (5) was started. I expected minimum 8380 (61% extension) for wave 5 which is already achieved but this wave 5 of ED must have three internal waves (abc).

Though, Wave (5) achieved its minimum levels but I can’t say if this wave is completed or not as it is difficult to find convincing (ABC) pattern in wave (5). So, I am leavening this wave here only and will concentrate on short term until I find a clear pattern. But will take extra cautions at higher levels as Nifty already achieved minimum extension as 5th wave is always confusing and misguiding.

Let’s take a look at very short term chart:

EW Analysis of Nifty for 17 Nov (Chart 2)

EW Analysis of Nifty for 17 Nov (Chart 2)

This is 5 minutes time bar chart of Nifty showing latest move after 8290. Nifty is going exactly as per my expectation if you compare my previous analysis report of last 4-5 sessions. I expect Nifty to touch at least 8398 for minimum extension of 5th wave and need to break at least 8415 to avoid 5th failure in my Thursday’s report Elliott Wave Analysis Report of Nifty for 14 Nov 2014.

Wave 5 already achieved minimum extension of 61% (8398) and now it needs to break previous high to avoid 5th failure. 100% extension for wave 5 is placed at 8446. There will be cautions for sharp correction near previous high as wave 5 of ED already entered in Extended Zone.

After completion of Ending Diagonal, Next correction must touch or break below the lower line of ED.

Let us see progress of wave (5) of Ending Diagonal closely to calculate more accurate levels.

EW Analysis of Nifty for 17 Nov (Chart 3)

EW Analysis of Nifty for 17 Nov (Chart 3)

This is again 5 minutes time bar chart of Nifty showing move only after 8321 which I assumed as the start of wave (5) of ED progressing as 3 waves move (abc).

It seems wave (a) and (b) of (5) is completed and last wave (c) is in progress. Speed and steepness of last upside wave also resembles the personality of wave (c). We generally expect wave (c) as 100% or above wave (a). 100% projection of wave (c) is placed at 8421 and 123% placed at 8437.

If we look closely at last wave (c) only (wave C is always a 5 waves move), the inner waves of (c) are identifiable. It seems wave 3 of (c) is completed and the extreme last wave 5 of (c) of this whole Ending Diagonal pattern is pending before correct ion.

If inner counts of wave (c) are correct then, 38% extension for wave 5 of (c) placed at 8400, 61% placed at 8411 and 100% placed at 8430. After 8411, wave 5 of (c) will enter in extended zone.

Conclusion:

By analyzing all conditions, a cluster of strong resistance can be seen in 8415-8446 levels as it is the area where last wave 5 of Ending Diagonal is expected to complete as highly extended on Chart 2, and extreme last wave 5 of (c) is also expected to complete as extended on Chart (3).

So, there are cautions for sharp correction from 8415-8446 range and that correction need to touch or break below lower line of Ending Diagonal Triangle shown on Chart 2.

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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"

Comments (7)

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  1. pradeep says:

    Hi Deepak,

    this is once of the best analysis I seen with perfect target low and top.
    Now I suspect nifty may take U turn with correction till 8350 or more deep.
    My Today 8350 PE closed @ 25 , buy prise @ 90 today high 56

    I may be exit @ 100 if you suggest that , please guide

  2. a kumar says:

    I think market we r in wave 4 of current rally.8350 need to hold to form wave 5.

  3. S.MD.IMRAN says:

    Excellent Analysis Sir, As always – I think 8650 lvls will come after a small correction – As this is a complete 5-wave sequence – It may be wave-a of 5 in expanding terminal.