Nifty almost achieved minimum target 8800 expected after break above 8689 in my previous analysis report Elliott Wave Analysis Report of Nifty for 03 Oct 2016 Onward. This analysis report is further update of my previous analysis as action expected in previous report is already happened.
Nifty opened gap up at 8770 and declined gradually towards 8740 followed by sharp swings between 8780-8740 later in the day. Overall it was a range bound day with volatility and finally Nifty closed 31 points up at 8769 after registering day’s low 8736 and high 8783.
Yesterday, more upside towards 8800 was expected and longs taken at 8689 were advised to hold with immediate / Intraday stoploss of 8718 whereas positional stoploss for all longs was 8665. Further I advised to book 50% longs in 8780-8800 range and hold rest with stoploss of 38% retracement of wave (3). Nifty bounced further to register day’s high 8783 without triggering immediate stoploss of 8718. Let’s have a fresh look at latest charts for further scenario.
Today I am covering the move after 2016 high 8968 only as there is some confusion in the pattern of previous waves which further making it difficult to identify short term moves. We will ignore previous waves for time being and will focus on very short term pattern only.
This is 30 minutes time bar chart of Nifty covering decline from 8968. This is the same chart with explanation which I explained in my yesterday report as there is no major change in wave counts on this chart.
The first decline from 9868-8688 may be wave (A) but inner waves are not convincing. Further bounce from 8688-8893 may be wave (B) as Double Zigzag Correction as explained in previous reports and further wave (C) may be completed at 8555. Wave (C) projected 100%-123.
Now, wave (5) of (C) started from 8800 is highly extended (projected more than 123%). So we can expect a sharp bounce towards 8800 as extended wave (5) retrace by 100% most of the time.
On the other hand, if this correction started from 8968 is already completed at 8555 as Simple Zigzag then this new impulse started from 8555 needs to break above 8968. Otherwise, Nifty can decline below 8555 only if this correction started from 8968 turn into Complex Correction (Double Zigzag or Triple Zigzag).
Let’s analyze the bounce from 30 Sep 2016 low 8555 to prepare further trading plan: –
This is 5 minute time bar chart of Nifty covering bounce after 30 Sep 2016 low 8555.
The bounce started from 8555 seems impulsive with inner wave (1) completed from 8555-8617, (2) completed from 8617-8565 as Simple Zigzag, (3) completed from 8565-8777 and wave (4) may be completed from 8777-8738 as Irregular correction.
Now, if wave (4) completed at 8738 then minimum 38%-61% projection for wave (5) is placed at 8822-8875. Wave (5) will be in extended zone after breaking above 8875 which is point to be cautious of small or big decline again.
Immediate stoploss for fresh longs must be 8751 [end of wave 2 of (5)] whereas 8738 [start of wave (4)] must be the positional stoploss for all the longs as explained above. Further, 8875 is the point after which we needs to be cautious for a small or big decline as wave (5) will be extended after breaking 8875.
For short/Medium Term, Nifty is expected to bounce further towards 8822-8875 range and stoploss for all longs must be 8738. Immediate/Intraday stoploss for longs must be 8751. So, 8738 can be use as actual stoploss because there is just minor difference between both the stoplosses.
Further this impulse started from 8555 will meet its all minimum requirements after breaking above 8822, whereas wave (5) of this impulse will be in extended zone after breaking 8875 which is the points after which we needs to be cautious of any small or big decline.
For Trading Point of View:
50% position of Longs taken at 8689 must be hold with final stoploss of 8738 expecting minimum upside targets 8822-8875. And try to book all the longs within 8822-8875 range to wait for further low risk opportunity.
Nifty can give 100-160 points decline after achieving 8822-8875 range (may be from a bit higher levels) but any trade can be decided during market hours only after seeing small pattern.
Trade in limited quantity and with strict stoploss to avoid heavy loss if we prove wrong in analysis.