Nifty opened flat today but decline more than 150 points within first 30 minutes of trade. I have shown the possibility for decline and stoploss in my yesterday’s Elliott wave analysis report of Nifty but I didn’t expect this crash of 240 points. Nifty closed today 227 points down at 8097 after giving low of 8083. Today’s sharp fall and break below 8140 has forced me to look back deeply on charts again but let me clear the confusion of Triple Zigzag first.
This is daily time bar chart of Nifty covering move after Jan high 8996. Previous I have shown the possibility of Triple Zigzag pattern but that pattern is negated now as lower line of wedge has been broken. Possibility of other pattern I will show after its completion only as it may create confusions for learners.
There is one more observation in chart which I had in my mind but ignored. The bounce from 8269 to 8844 after first fall was convincingly impulsive but wave “b” or “X” cannot be impulsive, it is always corrective of any simple or complex type. So, there may be some sort of Irregular Correction at bottom 8269 which I was not able to identify and which made it tough to identify exact counts.
So, I will concentrate on last down wave started from 8844 only as there is confusion in previous pattern:
This is 15 minutes time bar chart of Nifty showing bounce after Thursday’s low 8145.
Today’s sharp fall and break below low again with impulsive move has forced me to look at the whole waves again. There is something which I am missing within last fall started from 8844 because of which I am struggling with the counts from last 02 weeks.
After revising the chart again I came up with most probable wave counts as shown on chart. Please look carefully and try to read all small, smaller and bigger waves I marked on the chart. There may be a big irregular correction for inner wave 4 of (3) as I shown on chart.
So, it may be waves 1, 2, 3 and 4 are completed and 5th is in progress as represented on chart. Wave 5 already achieved its minimum projection of 38% at 8087 where as 50% and 61% are placed at 8005 and 7923 respectively. We need to see the progress of wave 5 on separate chart for its separate calculations.
This is 5 minutes time bar chart of Nifty covering last decline after 8355. It seems a progress of clean impulse with inner waves 1, 2, 3 and 4 are already completed and 5 is in progress as shown on chart. Minimum 38% projection for wave 5 is placed at 8056 which may be achieved tomorrow where as 50% and 61% is placed at 8027 and 7997 respectively.
If I see wave (5) closely then there also inner waves 1, 2 and 3 seems completed with wave 3 only 100% of 1 thus not extended. This further can result in highly extended wave 5 of (5) that can go 100%. 100% for wave 5 is placed at 8027 again (shown by blue marking). So, levels between 8030-8000 are important to watch if comes with Gap down.
Nifty chart is suggesting one more low may be within 8056-7997. Levels of 8030-8000 are important to watch if comes as there can be short term reversal (small or big) from these levels. Most of the technical are very week but I am still not confident to sell Nifty at these lower levels after seeing the structure and personality of whole decline after 8844.
This is my honest analysis based on my understanding of Elliott Wave Theory and is prepared for my students for training purpose. The conclusion of this report is to show my students how they can conclude the moves and levels of market by reading waves combined with wave’s personalities, wave patterns and Fibonacci Calculations.
Trading based on this analysis report will be your own decision.