Nifty can Decline Towards 11776-11645 Soon

| November 4, 2019

Nifty opened higher at 11928 and bounced further to register day’s high 11989 but declined back sharply by more than 80 points to register day’s low 11905 and closed 50 points up at 11941. 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.

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.

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.

From 10637, it seems wave (a or 1) completed from 10637-11694, wave (b or 2) may be completed from 11694-11090 and wave (c or 3) may be in progress.

23%-38% retracement of progress of wave (c or 3) is placed at 11776-11645. So, 11776-11645 is short term support and 11645 is short term downside breakeven point. Nifty is in positive zone as long as trading above 11645 and any downside reversal can be expected after break below 11645 only.

Now, let’s have a separate look at progress of wave (c or 3) started from 11090 on separate lowest time frame.

This is 30 minutes time bar chart of Nifty covering bounce after 11490 which I market as start of wave (c or 3) on daily chart.

It seems wave (1), (2), (3), (4) is completed and (5) is in progress from 11490 as marked on chart. Wave (5) achieved 61% projection after break above 11875 and next 100% projection is placed at 12114 which is a rare case.

Now, let’s have a separate look at progress of wave (5) started from 11490 on lowest possible time frame.

This is 15 minutes time bar chart of Nifty covering bounce after 11490 which I marked as start of wave (5) on 30 minutes chart.

It seems inner wave (i), (ii), (iii), (iv) completed till 11785 and wave (v) may be in progress. Wave (v) achieved minimum 38% projection but there is possibility for wave (v) to be an Ending Diagonal Triangle.

Within wave (v) started from 11785 as ED, may be inner wave [1] completed at 11945, [2] completed at 11843, [3] completed at 11989 and [4] may be in progress. Wave [4] needs to touch lower red line of the channel.

Wave [3] of ED is smaller than [1], so wave [5] needs to be smaller than [3]. We can calculate maximum range of wave [5] of ED after getting the end of wave [4] or we can identify reversal with the help of 38% retracement after completion of wave [5].

Note: ED is just a possibility right now based on the structure whereas confirmation will be after its completion only.

End of wave [2] of ED is at 11843 and same is pattern negation point. Possibility of ED will be negated of Nifty even touches 11842.

Conclusion

Long term/Medium term outlook is not clear because there are Multiple Possibilities on Charts. We can make guesses but confident outlook can’t be calculated. Overall there is possibility for bounce above 12103 without breaking below 10004 but this possibility can’t not be used for trading practically. So, we need to concentrate on small internal patterns and Intraday Levels for trade planning.

For short term, there is possibility of Ending Diagonal Triangle (ED) at top. And Nifty can first bounce above 11989 without breaking below 11843 and then can decline back towards 11776-11645 (short term support) again.

11843 is pattern negation point on downside. Possibility of ED will be negated of Nifty even touches 11843 and we need to look at pattern again if touched 11843.

We need to keep all these conditions in mind while deciding next trade.

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Trading Points of View:

Short term trading strategy would be “Buying on Dips” with stoploss of 11842 expecting bounce above 11989 and then “Selling on Rise” after achieving 11989. Entry levels Stoploss for selling can be calculating after completion of wave [4] of ED on 15 Minutes chart.

ED is just a possibility right now, so trade will be done only if all parameter of ED are in one line. Any change in pattern can be identified during market hours only. So, exact trade with entry levels and stoploss will be updated during market hours after confirmation from the pattern.

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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