Nifty opened Gap down today at 7725 followed by a decline till 7691 but bounced sharply at 11 AM after RBI announced 0.5% rate cut and rise gradually to hit day’s high of 7926. But Nifty failed to sustain at higher levels and declined 100 points from high before closing 47 points up at 7843.
From last 03 days I was mentioning that there is a possibility of Ending Diagonal for wave 5 and a bounce till 7928 cannot be ignored. Finally Nifty given that bounces today till 7926 and fell almost 100 points from there. Now, let us see on latest chart if there are signs of Ending Diagonal.
Today I am covering wave counts after 18 Sep 2015 high 8055 only as previous counts are same as I explained in my previous analysis report. Read Elliott Wave Analysis and Updates of Nifty for 29 Sep 2015
This is 15 minutes time bar chart of Nifty covering move after 18 Sep 15 high 8055 which I am expecting as a start of wave (5).
Now, we can see some signs of Ending Diagonal on this chart as:
- It may be wave (1) of ED completed from 8055 to 7723 as ‘abc’
- And it may be wave (2) of ED completed from 7723 to 7926 as “Irregular Correction”. Wave (2) retraced exactly 61% as we expected. And if we see the inner waves of (2) then it is Irregular Correction and inner wave (c ) of (2) projected exactly 138% of (a). Most of the calculations are suggesting completion of wave (2) at 7926 but if it not yet completed then it may not go above 8023 now.
- Wave (3) may be of 332 points at least as wave (3) is more than 100% of wave (1) in most of the cases and wave (1) is of 332 points here.
So, stoploss of shorts can be 8023 now, which will be reduced to 7929 when Nifty break below 7815.
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Overall Nifty can decline below 7541 in coming days/weeks to complete wave (5) and stoploss of shorts can be 8023 now, which will be reduced to 7929 when Nifty break below 7815. This decline can go below 7541 but with lots of volatile swings as overlapping as wave (5) is expected to progress as Ending Diagonal.
So, medium term Strategy should be “Selling on Rise” only with stoploss of 8023 until we see 7541 or any change in current wave’s pattern. Any change in wave’s pattern, trailing stoploss for sell and inner levels will be updated in daily Elliott Wave Analysis reports of Nifty.
Please trade light and with strict stoploss to protect yourself from heavy losses.