Nifty opened almost flat at 11910, registered high 11911 but traded with negative bias for whole session and declined by more than 110 points to register day’s low 11797 and closed 90 points down at 11823.
Yesterday, 11922-11930 was immediate resistance and 12000 was pattern negation point. Decline for one more low below 11769 was expected without touching 12001.
Trading strategy was to buy Suitable Nifty Puts with exact stoploss of 12001 expecting decline below 11769 in coming days. Nifty declined from resistance 11922-11930 and registered low 11797, further regular updates were sent during live market hours through WhatsApp. 11841 was trailing stoploss for shorts in last update. 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 [V] 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 ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at Irregular Correction at 10004 and wave ‘5’ may be in progress. Wave ‘5’ achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave 5 achieved 12103 but pattern doesn’t seem completed.
So, let’s analyse the progress of wave 5 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 ‘5’ of [v] on daily chart. Again, there is no change in wave counts on this chart.
It seems, inner wave (1) of 5 completed from 10004-10985, wave (2) may be completed from 10985-10585 Double Irregular Correction and wave (3) may be completed from 10585-11856, wave (4) may be completed from 12041-11614 and wave (5) may be in progress.
Wave (4) is very sharp because it formed on Election result day but it retraced wave (3) by 23%-38%.
23%-38% retracement of wave (3) is placed at 11697-11484 and Nifty bounced after registering low 11614. 38% retracement 11484 will still be the major downside breakeven/reversal points until wave (5) achieves its minimum projection.
Wave (3) is less than 161% (not extended), so wave (5) needs to be extended (project more than 61%). Minimum 61% projection for wave (5) is placed at 12872. So, 12872 is minimum target range for completion of wave (5).
Now, let’s have a separate look at progress of wave (5) on lowest possible time frame.
This is 30 minutes time bar chart of Nifty covering bounce after 11614 I marked as start of wave (5) on daily chart.
It seems an impulse completed from 11614-12039 and same can be marked as inner wave (i) of (5). Wave (ii) may be completed at 11769 as Irregular Correction or still in progress with inner wave (a) completed from 12039-11829, irregular wave (b) may be completed from 11829-12103 and wave (c) may completed at 11769 or still in progress.
If we assume wave (ii) completed at 11769 then the speed of wave (iii) is not matching with its personality. And the bounce from 11769-12000 also looks corrective which is indicating one more low below 11769.
So, may be inner wave (iii) completed at 11769, (iv) completed at 12000 and (v) may be in progress. Or it may be some other pattern but corrective bounce fromm11769-12000 is indicating one more low below 11769.
There are some conflicts in the wave counts on this chart, so we will concentrate on decline started from 12000 to calculate immediate moves and will look at bigger pattern after getting clarity.
Now, let’s have a separate look at decline after 12000 on lowest possible time frame to check its pattern.
This is 5 minutes time bar chart of Nifty covering decline after 12000 which I am expecting as start of new downside wave for new low below 11769.
It seems an Impulse completed from 12000-11817 and same can be marked as wave (a or 1). Wave (b or 2) may be completed from 11817-11930 (pattern not clear) and wave (c or 3) may be in progress.
Normal 100%-123% projection for wave (c or 3) is placed at 11747-11703. So, 11747-11703 is normal expected range for completion of wave (c or 3).
Within wave (c or 3), it seems inner wave (i), (ii) is completing and wave (iii) may be in progress. 38% retracement of progress of wave (iii) is placed at 11827.
So, 11827 is immediate breakeven point, Nifty if breaks and stay above 11827 for 5-10 minutes can turn the pattern into Irregular Correction and can result in further bounce towards 11877-11930, but 11877-11930 is again resistance.
11840 is end of wave (i), so 11840 is pattern negation point for last wave and same can be used as trailing stoploss for existing shorts.
Overall Nifty is indicating bounce towards 12872 without breaking below 11484 but this is a long range, so we need concentrate on internal wave patterns to calculate immediate levels and to identify short term moves.
For short term/Intraday, Nifty is still in negative zone and has possibility to decline further towards 11747-11703, decline can also extend lower but further levels can be calculated after achieving 11703.
11827 is immediate breakeven point, Nifty if breaks and stay above 11827 for 5-10 minutes can turn the pattern into Irregular Correction and can result in further bounce towards 11877-11930, but 11877-11930 is resistance again. Overall, we can think of any positivity after break above 12000 only.
We need to keep all these conditions in mind while deciding next trade.
Trading Points of View:
Sentiments are weak and Nifty has possibility to decline further towards 11747-11703 whereas 11827 is immediate breakeven point, 11877-11930 is good resistance and 12000 is major pattern negation point.
So, overall trading strategy would be “Selling on Rise” whenever getting opportunity expecting decline towards 11769-11747-11703. 11843 (some points above 11840) must be exact stoploss for any existing shorts. We can think of any buying after break above 12000 only.
Although, light intraday buying can be done if internal pattern and levels supports.
Further, I will update about 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.