Nifty warning correction till 8330-8195 without breaking above 8661

| July 7, 2015

Nifty opened flat and bounced suddenly to touch 8561 but traded with negative bias for rest of the day to register day’s low of 8484 followed by a sudden bounce of 40 points before closing 11 points negative at 8510. Let’s have a look on latest charts for further scenario.

Elliott Wave Analysis of Nifty for July 2015

Elliott Wave Analysis of Nifty for July 2015

This is 15 minutes time bar chart of Nifty covering move after June 2015 low of 7940. It seems a progress of impulse where inner waves 1, 2, 3 and 4 are completed and wave 5 is in progress or already completed at today’s high 8561. Wave 5 already achieved its normal projection of 61% after breaking 8493 and 70% after touching 8533 whereas 100% is placed at 8678.

If I am right at identifying this pattern then wave 5 is already extended which further can cause sharp decline till 8195 again from where this wave 5 has started as extended wave 5 often retrace 100% with faster speed.

Let’s have a look on wave 5 started from 8195 closely on separate chart so see its progress.

Elliott Wave Analysis of Nifty for July

Elliott Wave Analysis of Nifty for July

This is again 15 minutes time bar chart of Nifty covering move after 8195 which I am expecting as the start of wave 5.

Again it seems wave 1, 2, 3 and 4 are already completed and wave 5 is in progress as shown on chart. Wave 3 seems less than 161% here thus not extended, so we can expect wave 5 as extended (more than 61%). So, 61% projection for wave 5 is placed at 8572 and 100% is placed at 8688.

So again, if this wave 5 is going to be extended then we can see sharp decline after its completion till 8386.

Now we need to see the progress of wave 5 started from 8293 of 2nd chart.

Elliott Wave Analysis of Nifty for July

Elliott Wave Analysis of Nifty for July

This is 5 minutes time chart of Nifty covering move after 8293 which I am expecting as start of wave 5. Again an inner wave 1, 2, 3 and 4 seems completed and 5 may be pending.  61% for wave 5 is placed at 8588 and 100% placed at 8653. This wave also seems near to completion and corrective decline is expected.

Conclusion:

An impulse seems near to completion with extended wave 5 which cautions sharp decline after its completion. Wave 5 is started from 8195 which is extended and extended wave 5 often retraces completely with faster speed.

By seeing all the charts, there are possibilities of decline till 8330-8195 in coming session with 8653 as maximum upper limit. Nifty can decline from present levels (from today’s high) also as wave 5 is already highly extended.

So any buying must be avoided and “Selling on Rise” should be the trading strategy till we see any 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"

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