This Elliott Wave Analysis Report of Nifty for 16 Nov 2016 I prepared and sent today before 8:30 AM to my clients. I am posting this analysis report after market opening when action explained is already happened. The main chart of this report is slightly modified (written text) as this report I am posting just for my book subscribers/EWT learners for study purpose and for their future reference because this report has perfect example of identifying the possibility of “Irregular Correction” in advance and reasoning for the same. I will use this analysis report as examples in my next series of my educational articles and in my next “Book Updates”.
Nifty opened flat at 8284 but declined below 8200 just after opening and again traded with huge negativity for rest of the day. Nifty again declined more than 200 points to register day’s low 8093 before closing 187 points down at 8108.
Yesterday, decline towards 8177 was expected and advised to book profit in shorts in 8200-8177 range and wait for a bounce to get hint of next move of Nifty. Nifty achieved 8177 and even declined below 8100. Let’s have a fresh look at latest charts for further scenario.
Today I am covering bounce from 09 Nov 2016 low 8002 and previous waves counts are explained in previous analysis report Elliott Wave Analysis Report of Nifty for 15 Nov 2016.
This is 5 minutes chart of Nifty covering move from 9 Nov 2016 low 8002.
The bounce from 8002-8348 looks impulsive and can be wave (A), Nifty covered these 346 points in just 20 minutes, next decline from 8348-8117 can be wave (B) which retraced exactly 50% and next wave (C) may be completed from 8177-8598 as shown on chart.
This (abc) wave from 8002-8598 may be “wave (x) of Complex Correction”, or “part of Irregular Correction” or “inner wave (i) of Ending Diagonal Triangle”.
And within, decline from 8598, It seems wave (a or 1) is completed from 8598-8354, wave (b or 2) may be completed from 8354-8398 and wave (c or 3) may be in progress from 8398 which projected exactly 123%.
(I was expecting start of wave (5) from 8398 in my last report but now I adjusted the counts and showing it as wave (c or 3) because the wave started from 8398 projected 123% which is not normal for wave (5). But, if it is actually Highly extended wave (5) with huge 123% projection then Nifty needs to bounce sharply towards 8398, just a possibility.)
Further within wave (c or 3) started from 8398, it seems inner waves (i), (ii) and (iii) are completed till 8127 and next wave (iv) or (v) is in progress. If we assume wave (iv) completed at 8196 then next wave (v) achieved its exact minimum 38% projection at 8093 but the pattern doesn’t seems completed. The pattern of the decline from 8196-8093 looks like a three waves move (abc) whereas wave (v) can either be impulse of Ending Diagonal.
So, Nifty needs to decline more to complete wave (v) of (c or 3) OR if Nifty bounce from present levels towards 8196 then it can form an Irregular Correction for wave (iv) and we can see a decline again below 8093 to complete wave (v).
Read explained article about “Irregular Correction” and its personality at Irregular Correction of Elliott Wave Theory Explained by Deepak Kumar
38% retracement of wave (iii) of (c or 3) is placed at 8230 which is the point above which we can think of any reversal and same must be the stoploss reference for any shorts.
There is no conclusion for medium term as there is lack of confidence in clarity of waves of whole decline started from 8698. But for short term, 8230 is the point above which we can think of any reversal and there is still a possibility of more decline.
Stoploss for any shorts must be some points above 8230 and any buying can be planned only after seeing break above 8230 with impulsive pattern. So, we need to keep these conditions in mind when preparing a trading plan.
For Trading Point of View:
If Nifty bounce straightway towards 8196-8230 without breaking below 8093 then risk can be taken to Sell Nifty in 8196-8230 range using stoploss of 8237 (some points above 8230) expecting targets below 8093. But use strict stoploss because Nifty can reverse sharply if it has to reverse.
For buyers, risk of 30 points can be taken only if Nifty breaks sharply (without consolidation) above 8230 with strict stoploss of 30 points expecting minimum targets 8398.
Nifty is moving in huge range of 200-300 points every day so keeping small stoploss is difficult. So, trade very light (1-2 lots only based on your capacity) and safe traders must close position Intraday only. Don’t trade in panic and keep strict stoploss to avoid huge losses in case our trade goes wrong.
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