Nifty opened lower at 9478 and declined further to register day’s low 9448 but bounce from lower levels by more than 80 points to register day’s high 9535 before closing 16 points up at 9520.
Friday, 9513 was breakeven point for short term and 9472-9454 was the range from where a small or big bounce was expected. Trading strategy was to buy Nifty July 9300 call in 9472-9454 range with stoploss of 9429 expecting target 9565 which further can extend towards 9709. Nifty declined till entry range followed by bounce back and July 9300 Calls bounced from 208-262. Let’s have a fresh look at latest charts for further scenario.
Today I am analyzing bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my “All time frame” analysis report Elliott Wave Analysis of Nifty using All Time Frames
This is daily time bar chart of Nifty covering bounce from 24 Dec 2016 low 7893. I am not showing any wave counts on this chart because the bounce from 7893 is straight, steep and without even 23%-38% and is still carrying the personality of some sort of wave 3.
I have added this chart just to calculate Fibonacci levels. So, 23%-38% retracement of whole move (from 7893-9709) is placed at 9280-9015. So 9280-9015 is the expected targets range if any bigger correction is started.
Now, we need to analyze decline from all time high 9709 separately for more depth and clarity.
This is 30 minutes time bar chart of Nifty covering decline from all time high 9079.
The pattern of first decline from 9709-9560 is not clear because of repeated overlapping of waves within it, but I am assuming it as (abc) after seeing the later wave pattern. Next bounce from 9560-9698 and further decline from 9698-9448 also is also a combination of repeated (abc) waves as shown on chart.
This type of repeated (abc) cycle forms within Complex Corrections only (Double Zigzag or Triple Zigzag). I am not able to identify the exact pattern but the whole structure is indicating it as some type of corrective pattern as of now and there are possibilities of high above 9709 again in coming days.
Further, very last (abc) wave from 9575-9448 is indicating the possibility of Irregular Correction at bottom. So, there is possibility of bounce towards 9575-9615 followed by decline below 9448 because of this pattern. So, first we need to look at the pattern formed in 9575-9615 range in this case to decide further course of Nifty.
Let’s have a separate look at pattern of bounce from low 9448 to calculate very immediate breakeven point and outlook.
This is 5 minute time bar chart of Nifty covering bounce from 9448 which I am expecting as start of new impulse.
It seems wave (1) completed from 9448-9502, wave (2) may be completed from 9502-9475 and wave (3) may be in progress. We can see only 3 waves within the progress of wave (3), so there is still the possibility of Irregular Correction for wave (2).
So, 61% retracement of wave (1) is placed at 9468 which we can refer as stoploss for longs.
Same as I explained in my last analysis report, whole pattern of decline from 9709 became complex and confusing because of repeated overlapping of waves within it. The whole structure of the decline is indicating it as some type of corrective pattern and bounce above 9709 is possible but we need some clarity in pattern to calculate lower range.
For short term, 9468 can be referred as stoploss for longs and Nifty have possibility to bounce towards 9575-9615 range. Further, there is possibility of decline again for low below 9448 after achieving 9575-9615 but we need to check the formation of pattern in 9575-9615 range for conformation.
Trading Point of View:
Part profit can be booked in July 9300 call taken in 9478-9454 range and rest can be hold with fresh stoploss of 9467 expecting targets 9575-9615. Try to book or protect profit after achieving 9575-9615 range because there is possibility of decline below 9448 again from 9575-9615 range.
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