Please read whole Elliott Wave Analysis Report of Nifty till end. Don’t read just the title but read all the conditions and probabilities explained below.
Nifty opened gap down today at 7736 and traded with weakness for rest of the day. Nifty declined about 170 points from previous close with huge volatility to register day’s low 7588 before closing 155 points down at 7603. Let’s have a fresh look at latest charts.
Today I am showing Nifty move from 29 Feb 2016 low 6825. Earlier counts you can read in my previous analysis report Elliott Wave Outlook of Nifty for Budget Day 29 Feb 2016 Onward.
This is 30 minute time bar chart of Nifty covering move from 29 Feb 2016 low 6825. This is the same chart with explanation which I posted in my last analysis report as there is no change in wave counts on this chart.
As I explained in my last analysis report, it seems wave (1) completed from 6825-7094 and wave (2) completed from 7094-6969 then wave (3) started from 6969. Wave (3) started slow but extended sharply later with just 23% correction in between.
The bounce from 6969 is straight with just a 23% correction in between and with unfilled gaps. So, it is difficult to identify waves confidently. It may be wave (3) or inner wave [(iii) of 3] completed at 7539 and wave (4) or inner wave [(iv) of 3] completed at 7405. Now there are 02 conditions on chart: –
- If it is wave (4) completed at 7405 then wave (5) already achieved its minimum 38% projection and seems near to completion. Nifty can give 38%-61% correction of whole bounce from 6825-7749 in this case after completion of wave (5) at higher levels.
- If it is inner wave (iv) of (3) completed at 7405 then wave (v) of (3) also achieved its minimum 38% projection and seems near to completion. Nifty can give 23%-38% correction of whole bounce from 6825-7749 in this case after completion of wave (5) at higher levels.
There is no convincing sign of completion of impulse upside at 7777. But if an impulse (wave 3 or 5) is completed at 7777 then 23%-38% retracement is placed at 7552-7413 which we need to keep in mind in case of further decline.
As there are 02 possibilities on above 30 minutes chart, we need to analyze and concentrate on bounce from 7405 which is either start of wave (5) or inner wave (v) of (3). So we need to identify the completion of impulse from 7405 to catch next decline which could be of minimum 300-450 points.
This is 15 minutes time bar of Nifty covering decline from 16 March 2016 low 7405.
There are some changes in wave counts; most probably it may be wave (1) completed from 7405-7585, (2) completed from 7585-7479 wave (3) also may be completed at 7777. Wave (3) is just straight where we are not able to identify inner wave (iv) and (v) but there is no other possibility can be seen after break of 7651 today.
We cannot assume wave (3) completed at 7749 as Wave (4) will be overlapping wave (2) in this case after breaking below 7585 which is not possible within impulse.
On the other hand, if wave (3) completed at 7777 then when (4) must be completed at 7588. Wave (4) retraced deeply about 61% and reached just short of its maximum limit 7585 (start of wave 2), though these conditions are not normal but I am not able to find any other pattern if I have to considers all the rules of Elliott Wave Theory.
So, 7585 is important levels to see now. If wave (4) is completed at 7588 today then wave (5) can project minimum 38%-61% which is placed at 7730-7816 where as wave (5) needs to break above end of wave (3). So 7777-7817 range we can again expect till Nifty is trading above 7585. Even touch of 7585 will negate the whole pattern and we can see deeper correction till 7552-7413 which is 23%-38% retracement of whole move from 6825-7777.
Now let’s have a separate look at decline from latest high 7777 to identify its inner waves.
This is 5 minutes time bar chart of Nifty covering decline from 31 Mar 2016 high 7582 which I have shown as start of inner wave (4) on above 15 minutes chart.
It may be wave (A or 1) completed from 7777-7666, wave (B or 2) may be completed from 7666-7764 and wave (C or 3) may be completed from 7764-7588. Within wave (C or 3), inner wave (5) projected exactly 38% at 7588.
- If this pattern is (abc) then Nifty should not even touch 7585 as this (abc) pattern would be wave (4) of 15 minutes chart where start of wave (2) is 7585.
- And if this pattern is Wave 1, 2 And 3 then Nifty should not even touch 7666 as 7666 is start of wave (2) and wave (4) can not overlap wave (2).
So, 7585 is important level on downside below which Nifty can show deeper correction and 7666 is important levels on upside above which Nifty can show 7777 again.
The latest pattern on chart is indicating a high above 7777 again may be till 7777-7816. Though conditions are not completely fair but no other convincing pattern can be seen at present. And Nifty should not even touch 7585 to keep the pattern intact as explained above. Touch of 7666 on upside will give more confidence to this possibility.
Even touch of 7585 will negate the whole pattern and possibilities will be open for 7552-7413 which is 23%-38% retracement of whole bounce from 7628-7777.
Stoploss for any longs must be 7585 and stoploss for any shorts must be 7666 as explained above. Any trade can be done by keeping in mind the conditions explained above with small stoploss.
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