Nifty Trading Strategy for 03 Aug 2020 based on Elliott Wave Analysis

Nifty targets and trading strategy for Monday, 03 Aug 2020 onward based on Elliott Wave Analysis by Deepak Kumar

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Nifty opened higher at 11139, registered high 11150 but failed to sustain at higher levels and declined back by more than 120 points to register low 11026 and closed 28 points down at 11073.

Friday, 11134-11166 was immediate intraday resistance and Nifty was expected to give one more decline of 100-150 points from this resistance. Trading strategy was to sell Nifty on rise in 11134-11166 range with stoploss some points above 11166 expecting 100-150 points decline.

Nifty entered in 11134-11166 range, registered high 11150 and declined back till 11026. Now, let’s have a fresh look at latest charts for further scenario.

We are analyzing Nifty on all time frames and let’s start Elliott Wave Analysis of Nifty with Monthly chart.

Elliott Wave Theory Analysis of Nifty for Long Term

This is monthly time bar chart of Nifty covering its life time of move. There is no major change in wave counts on this chart.

It seems major wave (1) completed from 775-6357, wave (2) may be completed from 6357-2252, wave (3) may be completed from 2252-12430 and major wave (4) or (5) may be in progress.

Pattern of wave (3) is not convincing but it is corrected by more than 38% so I am assuming wave (3) completed at 12430 based on its 38% retracement.

38% retracement of wave (3) is placed at 8542 and Nifty already traded below 8542 for 2-3 sessions. Breaking and staying below 8542 was indicating signs of major recession and 8542 but Nifty bounced back again.

Further wave (3) is retraced deeper than 38% but we don’t have any other pattern right now, so I am still assuming the decline after 12439 as wave (4) unless wave (1) is overlapped. But further outlook will be calculated based on the pattern of decline after 12430.

So, let’s have a separate look at progress of major wave (4) started from 12430 to check its pattern.

Elliott Wave Theory Analysis of Nifty for Medium Term

This is daily time bar chart of Nifty covering decline after all time high 12430 which I marked as start of major wave (4) on monthly chart. Again, is no major change in wave counts on this chart.

It seems an impulse completed from 12430-7511 and same can be wave (A) or (C of Irregular Correction). 61% of this whole impulsive decline is placed at 10550 and same was major resistance. Nifty gave good breakout above 10550.

From low 7511, it seems an (abc) wave completed from 7511-9889 but decline from 9889-8806 is also corrective (abc) and next wave bounced above 9889 again.

This (abc) bounce followed by (abc) decline followed by bounce is making the pattern complex. It can be progress of double zigzag correction with first (abc) cycle completed from 7511-9889, wave (X) may be completed from 9889-8806 and 2^nd (abc) cycle may be in progress.

Within 2^nd wave cycle, it seems wave (a) completed from 8806-10328, wave (b) may be completed from 10328-9544 and wave (c) may be in progress. Wave (c) achieved normal 100%-123% projection placed at 11066-11425.

23%-38% retracement of progress of wave (c) is placed at 10917-10655. So, 10917-10655 is major support and 10655 is major downside breakeven point. Nifty is in positive zone for short/medium term as long as trading above 10655 but minimum target range 11066-11425 is achieved.

Nifty if close a complete daily candle below 10655 can result in bigger decline towards 9544-8806 again.

Now, we need to analyze very last bounce started from 10562 on lowest possible time frame to check its pattern and to calculate immediate levels.

Elliott Wave Theory Analysis of Nifty for Short Term and Inttaday

This is 15 minutes time bar chart of Nifty covering bounce after 10562 which is part of wave (c) on daily chart and I am analyzing it independently. It can be inner wave 5 of (c).

The bounce seems impulsive with wave (1) completed from 10562-10826, wave (2) may be completed from 10826-10579, wave (3) may be completed at 11238, wave (4) or (5) may be in progress.

There is doubt if wave (4) completed at 11056 or not because if wave (4) completed at 11056 then wave (5) achieved minimum 38% projection but pattern of wave (5) doesn’t seems completed.

Either wave (4) is forming a complex Irregular Correction or wave (5) completed with a pattern which I am not able to identify.

38% retracement of wave (3) is placed at 10986. So, 10986 is immediate short term downside breakeven point. Break and stay below 10986 for more than 30 minutes can result in decline towards major support 10917-10655.

There is confusion in wave (4) or (5), so we need to concentrate on decline after recent high 11341 to check its pattern and to calculate immediate levels.

After 11341, it seems wave (a or 1) completed from 11341-11153, wave (b or 2) may be completed from 11153-11229 and wave (c or 3) may be either completed at 11051 or still in progress.

23%-38% retracement of progress of wave (c or 3) is placed at 11109-11145. So, 11109-11145 is immediate resistance and 11145 is immediate upside breakeven point. Nifty is in negative zone for very short term as long as trading below 11145 and can give one more decline of 110-160 points (38%-61% projection of whole decline] but trading above 11145 for more than 15 minutes can result in bounce towards 11299-11341 again.

Nifty Outlook and Important Levels for 03 Aug 2020 based on Elliott Wave Analysis

Nifty Outlook and Important Levels for Medium and Short Term

10917-10655 is major support and 10655 is short major downside breakeven point. Nifty is in positive zone for short/medium term as long as trading above 10655 but minimum target range 11066-11425 is achieved.

Nifty if close a complete daily candle below 10655 can result in bigger decline towards 9544-8806 again.

Nifty Outlook and Important Levels for Intraday

11109-11145 is immediate resistance and 11145 is immediate upside breakeven point. Nifty is in negative zone for very short term as long as trading below 11145 and can give one more decline of 110-160 points.

But Nifty if trades above 11145 for more than 15 minutes can result in bounce towards 11299-11341 again.

On downside, 10986 is short term support/downside breakeven point. Break and stay below 10986 for more than 15 minutes can result in decline towards major support 10917-10655.

Low Risk Trading Strategies of Nifty for Monday, 03 Aug 2020

Pattern is bit complex at top, so only intraday trades are safe near breakeven point with small stoploss.

Intraday trading strategy is Selling on Rise in 11109-11145 range with stoploss some points above 11145 expecting decline of 110-160 points from resistance. 10986 is good short term support.

Nifty if breaks and trade above 11145 for more than 15 minutes then trading strategy would be Buying on Dips in 11145-11109 range with stoploss some points below 11109 expecting bounce towards 11299-11341.

Positional buyers can keep stoploss below 10986 on 30 minutes closing basis whereas 10655 is final stoploss for longs on daily closing basis.

Further, we 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 our “Nifty Live Updates” subscribers.