Elliott Wave Analysis of Nifty for 18 Oct 2019 Onward

| October 18, 2019

Nifty opened flat at 11466, declined to register day’s low 11439 but bounced back by 160 points to register day’s high 11599 and closed 122 points up at 11586.

Yesterday, 11412-11369 was immediate support and 11369 was immediate downside breakeven point. Trading strategy was to sell Nifty after break and stay below 11369 but Nifty bounced further to register high 11599 without entering in support and even pattern negation point 11492 was broken. 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 [5] 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 [iii] of [5] is completed at 11171 and [iv] may be completed at Irregular Correction at 10004 and wave [v] may be in progress. Wave [iii] is not extended, so wave [v] needs to be extended. Minimum 61% projection for wave [v] is placed at 12689.

So, let’s analyse the progress of wave [v] 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 [v] of [5] on daily chart.

The bounce from 10004-12103 is confirmed as (abc) because of overlapping of waves after break below 10985. Earlier we had 02 possibilities for this setup but possibility of Irregular Correction is almost negated because decline after 12103 doesn’t look like Impulse. Now, Ending Diagonal Triangle is most probable pattern for this setup.

So, the (abc) bounce from 10004-12103 can be inner wave (1) of ED and wave (2) of ED is either completed at 10637 as Simple Zigzag or still in progress as Complex Correction.

[If it really ED started from 10004 then next 1-2 years are going to be tough for analysts and traders. Many TA indicators fails to deliver results during Ending Diagonal and this ED will be very big. Inner wave (1) of ED is of 2100 points and took more than a year to complete, so completion of wave (3), (4) and (5) may take even more time]

Now, we need to concentrate on bounce after 10637 to check if pattern is supporting the possibility of wave (3) of ED or not.

After 10637, it seems wave (A) completed from 10637-11141, wave (B) completed from 11141-10670 and wave (C) may be completed from 10670-11694. I am marking is as (ABC) because this bounce is 3 waves move and waves are overlapped after breaking below 11141.

The (ABC) corrective bounce from 10637-11694 is warning cautions for further decline towards 10637 again. Resistance 11302-11452 is broken, so we need to concentrate on decline after 11694 to calculate further move.

Now, let’s concentrate on decline after 11694 to check its pattern and to calculate further move.

This is 30 minute time bar chart of Nifty covering decline after 11694 which I am analyzing independently.

Within decline from 11694-11090, overall pattern is not clear but decline from 11553-11090 looks like an Impulse and this Impulse can be wave (C) only. So overall I marked this decline from 11694-11090 as (ABC) although the pattern is not completely clear.

Further, the bounce after 11090 seems impulsive. So, I am ignoring the decline from 11694-11090 for time being because pattern is not completely clear and analyzing the bounce after 11090 to calculate further move.

This is 5 minutes time bar chart of Nifty covering move after 11090 which I analysing independently.

The bounce seems impulsive with inner wave (1) completed from 11090-11322, wave (2) completed from 11322-11189 as Irregular Correction, wave (3) may be completed from 11189-11481, wave (4) may be completed from 11481-11411 as Simple Zigzag Correction and wave (5) may be in progress. [Wave (3) is slower than wave (1) which confused us earlier]

Wave (3) is not extended, so wave (5) needs to be extended. So, minimum 61%-100% projection for wave (5) is placed at 11652-11802. So, 11652-11802 is minimum target range for completion of wave (5) but breaking above 100% projection 11802 is a rare case.

Within wave (5), it seems inner wave (i), (ii) is completed and (iii) may be in progress. 23%-38% retracement of progress of wave (iii) is placed at 11563-11540.

So, 11563-11540 is immediate support and 11540 is immediate downside breakeven point. Nifty can bounce towards 11652-11802 from support without breaking lower below 11540. But Nifty if breaks and stay below 11540 for more than 15 minutes can result in further decline towards 11447-11411.

Conclusion

For Long Term, there is possibility of Ending Diagonal (ED) Triangle pattern for the move after 11004. If it is really going to be ED then next 1-2 years are going to be tough for Analysts and traders because many TA indicators fails to give desired results during ED. And this ED will be big because its inner waves (1) itself is of 2100 points. Nifty can rise with many volatile and unexpected up/down swing if it is going to be Ending Diagonal Triangle as I explained on Daily Chart.

For Medium/Short Term, (ABC) corrective move from 10637-11694 is indicating further fall towards 10637 again but upside resistance 11302-11452 is also broken. So there are conflicts in medium/short term pattern and we need to concentrate Very Short Term/Intraday Levels.

For Intraday/Very Short Term, 11563-11540 is immediate support and 11540 is immediate downside breakeven point. Nifty can bounce towards 11652-11802 from support without breaking lower below 11540.

But Nifty if breaks and stay below 11540 for more than 15 minutes can result in further decline towards 11447-11411.

On upside, bounce towards 11652-11802 is expected but there will be cautions for decline towards 11411 again after achieving 11652 because wave (5) started from 11411 will be extended after achieving 11652.

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For Intraday/Very Short Term, any decline towards 11560-11540 can be used to buy Nifty with exact stoploss of 11526 expecting bounce towards 11652-11802.

After achieving 11652-11802, there will be cautions for decline towards 11411 again without breaking higher above 11802. So, selling can be planned after achieving 11652-11802 with small stoploss if internal pattern also indicated reversal at that time.

Further, I will update about the 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 to all my “Nifty Live Updates” subscribers.

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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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