Nifty opened higher at 9704 and registered new all time high 9709 but failed to sustain at higher levels and decline back sharply to register day’s low 9630 before closing 37 points down at 9637.
Friday, Nifty was expected to bounce towards 9706-9779 at least in near term and 9649 was short term reversal or breakeven point. And suggested to hold Nifty longs taken in 9590-9581 range on last Thursday expecting minimum extended targets 9706-9779. Nifty achieved minimum target 9706 and then decline back. Let’s have a fresh look at latest charts for further scenario.
Today I am analyzing bounce from 24 May 2017 low 9341 this analysis report is further update on my previous analysis report Nifty can Bounce Towards 9661-9728 in Coming Sessions
This is 15 minute time bar chart of Nifty covering bounce from 9341 which I am expecting as start of new impulse.
It seems an impulse has been completed from 9341-9709 and some sort of small or big correction has been started as marked on chart. Wave (5) of this impulse projected only 38%.
Normal 23%-38% retracement of this impulse is placed at 9622-9568. So, 9622-9568 is the minimum range we can expect on downside and 38% retracement 9568 is the point below which we can think of any big reversal.
If we look at decline from top then it seems wave (a or 1) of correction has been completed. So, let’s have a separate look at decline from all time high 9709 on separate lowest time frame chart.
This is 5 minutes time bar chart of Nifty covering decline from all time high 9709.
It seems an impulse has been completed from 9709-9630 and this impulse can be wave (a or 1) of small of big correction. (wave ‘a’ in case of small correction AND wave ‘1’ in case of big correction).
Inner wave (v) of (a or 1) started from 9679 is highly extended so we can expected sharp 100% retracement of this highly extended wave. Means, extended wave (v) is started from 9679 and we can expect a sharp bounce towards 9679 at least.
So, if wave (a or 1) completed at 9630 then next wave (b or 2) may complete somewhere above 9679 followed by wave (c or 3) below 9630 again.
Nifty achieved our minimum target 9706 to complete the impulse. And now it seems a small or big correction has been started. Nifty can decline towards 9622-9568 in case of small correction and bigger correction can be expected only if Nifty breaks below 9568. So, 9568 is the point below we can think of any bigger correction after confirming with the pattern.
But a sharp bounce towards 9679 is expected because of extend wave (v) of downward impulse started from 9709.
So, we need to keep all these conditions in mind while deciding a trade.
Trading Point of View:
According to conditions on chart, Nifty if bounce towards 9679 then small risk can be taken to initiate light shorts in 9679-9709 range with exact stoploss of 9710 expecting downward targets 9622-9568.
Nifty is expected to bounce towards 9679, so one can also buy Nifty for target 9679 with stoploss of 9621 if get chance with good risk reward.
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