Nifty opened Gap down today at 8445 and traded with weakness for rest of the day to decline gradually till 8337 before closing 112 points down at 8349. Nifty also achieved 8380 without breaking above 8480 which we expected yesterday.
In some of my previous reports I mentioned repeatedly that conditions are not confident for positional longs and we can see a decline below 7940 or 38%-61% correction of total move from 7940 to high before further upside. Read Long Term and Short Term Elliott Wave Analysis of Nifty as on 10 Aug 2015. So, today I am taking a fresh look on move after 2015 low 7940.
This is hourly chart of Nifty covering move after 2015 low 7940. It seems an impulse completed from 7940 to 8655 as shown on chart and also explained in many of my previous analysis reports. Please read the counts on charts carefully.
Completion of this impulse we identified earlier but main focus is on the correction after 8655. Nifty declined till 8321 after 8655 followed by rise till 8621 and then decline again. So, the pattern may be a (ABC) correction or waves 1, 2 and progress of 3 of an impulse. Chances of (ABC) correction are more till now as explained later.
We were expecting at least 38%-61% correction of this impulse. 38% corrective is already achieved after breaking 8380 where as 61% is placed at 8213 which may or may not be achieved. There is also an unfilled gap between 8180-8195 which is near 61% retracement.
Let’s see the decline from 8655 closely on separate 30 minutes chart:
This is 30 minutes time bar chart of Nifty covering move after July high 8655 which we expecting as waves ABC or 123. Chances are more for ABC till now as if wave (C or 3) competes somewhere in 8321-8208 range and bounced till 8321 again then wave 4 will overlap wave 2 which is not possible within impulse. 100% projection for wave (C or 3) is placed at 8287 and 123% is placed at 8208 which is near 61% retracement of whole move from 7940-8655.
So, we should not be overconfident about major decline from here seeing the scenario as if this pattern is ABC then we can see high well above 8655 again. Now, we need to have a fresh look on decline after Aug 2015 high 8621 to see progress of this impulse.
This is 5 minutes time bar chart of Nifty covering move after today’s high 8621. The move from top seems impulsive and by seeing the personality of decline, it seems this impulse is somewhere within last wave (5). May be inner wave (3) completed at 8383 followed by 23% retracement till 8433 as wave (4) and wave (5) downward has started.
Wave (3) is highly extended so we can usually see 38%-61% projection wave (5). Wave (5) already achieved its minimum projection of 38% after hitting 8341 whereas 61% is placed at 8285 and 100% is placed at 8194 (in case of extended 5th wave).
We can see a small or big bounce after completion of this impulse at lower levels. The bounce may be 23%-61% (if this decline after 8655 is impulsive) or a high above 8655 (in case decline after 8655 is corrective).
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An impulse started from 8621 seems near to completion which already achieved its minimum parameters but can also go till 8285 in normal case and till 8194 in extended case. And we can see a small or big bounce after completion of this impulse where this bounce may take Nifty above 8655 or just 23%-38% of whole decline from 8321.
Though, impulse is near completion but we can’t calculate exact bottom as of now. So the strategy for tomorrow should be to buy Nifty only if it trades above opening price any time after 9:31 AM using stoploss of day’s low, otherwise be on side. Targets can be seen later after seeing latest wave pattern as at least a small or big bounce is expected.
Trailing stoploss for existing shorts should be 8383.
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