Nifty opened gap down at 7426 and declined sharply till 7409 but bounced sharply from lower levels to rise gradually till 7468. But Nifty crashed again from 7468 to 7417 just before closing 13 points down at 7424. Overall it was a typical volatile day on Expiry.
Yesterday I mentioned that “Nifty to bounce till 7505-7565 without breaking below 7418 but there is no indication of weakness even if Nifty break below 7418 and wave (iv) can turn into complex correction”. Stoploss of 7418 was triggered at opening only followed by volatile session. Now let’s have a fresh look at latest charts.
Today I am showing wave counts from March 2015 high 9119 as previous counts are same as I explained in my previous all time frame report Nifty is Highly Bullish for Long Term – Elliott Wave Analysis as on 05 Jan 2016.
This is daily time bar chart of Nifty covering move after Jan 2015 high 9119 which I have explained in many of previous analysis report and expecting it as a progress of Triple Zigzag. This is the same chart with explanation which I posted in my last report as there is no change in it.
Move from 9119-7539 was clear in my previous report which I expected as completion of (abc-x1-abc) followed by progress of wave (X2) but pattern for wave (X2) was not clear.
But now, there are some indications that wave (X2) may be in progress as “Irregular Correction” which needs to complete at or above red line drawn on chart which is around 8200-8400.
Wave (b) of this correction may be completed at 7241 or may complete somewhere at lower levels followed by sharp wave (c) upwards for 8200-8400 to complete wave (X2) followed by crash for new low again to complete last ‘abc’ cycle of Triple Zigzag.
So, we need to analyze wave (X2) separately to calculate its expected range:
This is again daily time bar chart of Nifty covering move from Sept 2015 low 7359 which I have marked as start of wave (X2) on first daily chart. This is again the same chart with explanation which I posted in my last report as there is no change in it.
It seems wave (X2) is also progressing as “Irregular Correction” with inner wave (A) completed from 5539-8336 followed by wave (B) may be completed at 7241 and is Irregular.
And within wave (B), it seems inner wave (a) completed from 8336-7714 followed by wave (b) from 7714-7972 which is “Irregular Correction” and inner wave (c) may be completed at 7241. Inner wave (c) of (B) already achieved 100% after achieving 7350 whereas 123% is placed at 7204. So even if wave (B) is not completed at 7241, it may not go much below 7204.
We can expect wave (C) to rise till 8200-8400 in short term if we are right at identifying pattern.
Now, we need to analyze inner wave the bounce after this year low 7241 on 5 minutes charts to calculate short term scenario.
This is 5 minutes time bar chart of Nifty covering move after 20 Jan low 7241 which I am expecting as start of wave (c) of (X2).
It seems wave (1) is completed from 7241-7398 (difficult to identify inner waves), wave (2) may be completed from 7398-7250 and wave (3) may be in progress from 7250.
And within wave (3), may be inner wave (iii) completed at 7487 and wave (iv) may be in progress as Complex Correction (most probably Triple Zigzag Correction) which needs to complete below 7409. Next wave (v) needs to project minimum 38%-61% which is about 90-150 points.
Let’s have a separate look at structure of wave (iv) of (3) separately on 5 minutes chart:
This is again 5 minutes time bar chart of Nifty covering decline after 25 Jan 2016 high 7487. The whole structure is complex in nature and most probable counts I have shown on chart.
This whole pattern may be a progress of Triple Zigzag Correction where (abc-x1-abc-x2) is already completed and last (abc) cycle is in progress as shown on chart. Last (abc) needs to completed below last low 7409 but should not break below lower red line.
We can see a very sharp and sudden bounce above 7487 after completion of last (abc) if I am right at identifying the pattern. And once Nifty breaks above upper red line joining X1-X2, it should not break below the same line again.
Read this article to know about structure, nature and importance of Triple Zigzag Correction Triple Zigzag Correction of Elliott Wave Theory Explained by Deepak Kumar.
There is possibility of Triple Zigzag Correction at top which is known for a very sudden and sharp reversal. If I am right at identifying the pattern the Nifty can once break below 7409 to complete Triple Zigzag followed by a very sharp and sudden bounce to break above 7487.
And breakout from upper red line joining waves X1-X2, Nifty should not break below that line again.
So for Intraday and Very Short Term, Nifty can be bought in 7409-7393 range with Stoploss of 7379 expecting immediate targets 7487-7547. Better to trade in Nifty Feb Cal Options as bounce must be steep and sudden if we are right at identifying pattern.
Safe traders can wait and buy Nifty after break above upper red line joining X1-X2 with 5 points stoploss expecting same targets.
For long term, Positional March Nifty Calls bought from 7300-7240 range may be hold without any exact stoploss till next updates.
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