Today I am preparing all time frames Elliott Wave analysis report of Nifty. Though there is no major change in long term counts but still preparing a fresh report as last long term analysis report I prepared 04 months back on 07 Sep 2015.
This analysis report will cover all time frame wave counts of Nifty, medium/long term outlook of Nifty and some important points useful for Elliott Wave Theory learners. So, let’s start with monthly chart.
As we know, Elliott Wave Theory is a never ending wave’s cycle starts from the birth/beginning of any financial script. Nifty born in 1995 and we need to see chart covering move from 1995 for Elliott Wave theory analysis and move from 1995 can be seen only on monthly chart. So, let’s start from the beginning.
This is monthly time bar chart of Nifty covering move from 1995 which is the beginning of Nifty. It seems a bigger wave (1) completed at 6357 in 2008 followed by bigger wave (2) at 2252 which retraced almost 78%. Then there is bigger wave (3) started from 2252 which is somewhere within inner lowest degree wave (iii) of Bigger (3). Look and try to understand bigger and inner wave counts carefully on chart.
For deep explaination of these counts read my previous report prepared on Oct 2014 Elliott Wave Analysis of Nifty for All time Frames Dated 18 Oct 2014.
By these counts, it seems Nifty have long way to go on upside and with faster speed. But let’s see what the inner wave counts of bigger wave (3) are suggesting. Wave counts till 2012 low 4531 are clear which I have marked as completion of inner wave (ii) of bigger (3) on chart. So, let’s see progress of inner wave (iii) of bigger (3) started from 4531 on next weekly chart.
This is weekly time bar chart of Nifty covering move after 2012 low 4531 which I have marked as start of inner wave (iii) of bigger (3) on monthly chart.
Here also, it seems inner wave (iii) of bigger wave (3) is within its inner wave (2) as shown on chart. Just keep in mind that it is inner wave (ii) of bigger wave (3) started from 4531 and counts the next wave independently to avoid confusions.
It seems an “Leading Diagonal Triangle” (LD) is completed from 4531-6229 which is always wave (1) followed by a “Simple Zigzag” correction completed from 6229-5118 as wave (2) and wave (3) is started from 5118.
And within wave (3), it seems inner wave (iii) is completed at all time high 9119 and (iv) in progress.
Even if we are wrong in identifying previous waves, there is Leading Diagonal from 4531-6229 and LD is always wave (1), means it is a start of an impulse and waves (2), (3), (4) and (5) needs to complete. This chart suggests that even wave (3) is not completed yet and wave (4) and (5) are still pending.
And if we look carefully at this weekly chart then both wave (2) and ((ii of 3) are “Simple Zigzag”, thus there are chances for wave (iv of 3) and (4) to be complex correction (exceptional rule of alternation). Wave (iv of 3) is already progressing as “Complex Correction” which I have explained on next charts.
Thus, the whole setup is suggesting that there is long way to go for Nifty on upside.
Now, move till 2014 low 5933 is clear which I have marked as start of inner wave (ii) of (3) on above weekly chart and we need to see move after 5933 separately on lower time frame chart. So, let’s analyze move after 2014 low 5933 on separate daily chart.
This is daily time bar chart of Nifty covering move after 2012 low 5933 which I have marked as start of inner wave (iii) of (3) on weekly chart.
It seems wave (iii) is already completed from 5933-9119 as shown on chart. Wave (2) retraced just 23% in this impulse as “Irregular Correction” and wave (3) is just marginally above 100% of (1). Wave (4) is “Simple Zigzag” correction followed by highly extended wave (5) as Ending Diagonal Triangle.
After completion of wave (iii) at 9119 with ED, there is type of “Complex Correction” going on from all time high 9119 as wave (iv). Though wave (iv) retraced more than 38% retracement there is no other pattern I can identify there.
This Ending Diagonal at top is explained in details in my previous article Which Time Frame Chart to use for Elliott Wave Analysis – Explained on Complete Nifty Chart.
On the other hand, there is Ending Diagonal at top from 7118-9117 followed by progress of Complex Correction going on from 9119 which made a long consolidation pattern at top running from last 18 months.
If I have to believe on charts then this long consolidation pattern at top is not bearish. Markets generally don’t consolidate at top in bearish trend, a crash in market is often sudden and sharp. This long consolidation at top is an indication of hesitation in market participants going on from last 18 months but they are not willing for selloff. Thus, whenever investors see any sigh of positivity will participate aggressively after a long wait and market can shoot higher in quick time, may be quicker than anyone expected.
Thus we can expect a great upside rally after completion of this “Complex Correction” started from 9119 and we needs to identify completion of this “Complex Correction” to catch next biggest upside rally.
So, let’s analyze the decline after 9119 separately on daily chart:
This is again daily time bar chart of Nifty covering move after Jan 2015 high 9119 which I have explained in many of previous analysis report.
There is lots of overlapping of waves in this decline so most probably this decline is not impulsive. After observing all the waves setup it seems progress of complex correction and most probable counts I have shown on chart.
It may be a progress of “Triple Zigzag” (abc-x1-abc-x2-abc) correction where (abc-x1-abc) is completed from 9119-7539 and (-x2-abc) is still pending. If I am right at identifying wave counts then wave (X2) needs to complete at or above upper red line shown on chart which is around 8400 right now followed by decline for new low as last (abc) cycle of Triple Zigzag. After completion of this Triple Zigzag, Nifty cab start steep and fast upside rally for new high.
The move after completion of Triple Zigzag correction is often sharp, fast and in straight line till the start of correction. This correction is started from 9119, so we can expect a quick rise till 9119 without any break after completion of Triple Zigzag. Read this article Triple Zigzag Correction of Elliott Wave Theory Explained by Deepak Kumar to understand the importance and effect of Triple Zigzag Correction.
On the other hand, Triple Zigzag is most complex pattern of Elliott Wave Theory which is very difficult to identify in advance and but it easy to identify when it is near to completion or when it is completed.
I posted an analysis report 6 months before where I suggested to save money for next bull rally of 2000 points in nifty in quick time but I didn’t see any sign of completion of correction till now. Every low comes with a new suspense and this complex correction is still extending. But whenever it completes, it will be a rare investment opportunity for great returns.
One example, in Oct 2014 I was not able to identify any move for almost 1 month but later that move completed at Triple Zigzag and I identified as soon as it completed and posted a report suggesting Nifty to bounce from 7779 to 8380 without breaking below 7723 when most of the world was bearish. Nifty bounced from 7800 to 8380 in just 10 days. Link to that report is Nifty can Show 8380 before breaking below 7723.
So, Complex Corrections are difficult to identify in advance and it keep other technical indicators opposite but it is easy to identify when it is near to completion and next move is always surprising after that.
So, we just need to go with inner waves of this correction on lowest time frames for small moves which I am explaining in my daily analysis reports till we identify completion of this bigger complex correction. Or maybe it is not Triple Zigzag but whatever it is, we will be able to identify as waves progresses.
After seeing wave counts on the entire charts, these are the following observations:
- It may be bigger wave (3) in progress from 2252 on monthly chart which is still somewhere in middle, thus indicating long way on upside.
- There is identification of “Leading Diagonal” from 4531-6229 on weekly chart which is always wave 1, thus we can expect a complete impulse upside which is still in middle, thus Nifty have scope of new highs.
- There is long consolidation pattern at top running from last 18 months on daily chart. Consolidation at top is always a sigh on bullishness indicating a good rally on upside.
- There is “Complex Correction” type of pattern going on from 9119 (most probably Triple Zigzag). We can expect a great sharp upside rally after completion of Complex Correction.
So by analyzing all observation, the long term outlook of Nifty is highly bullish but Nifty is in consolidation phase at present. Very short term outlook I am explaining everyday in my daily analysis report and will definitely update whenever I see the completion of this Complex Correction or some other pattern.
Points for Students/Learners:
Just read carefully from start and try to understand how I started from beginning on Monthly chart (from birth of Nifty) and came to last inner waves step by step following lower time frame.
And try to understand that there is no independent wave on any chart, counts on daily chart are continuation on weekly charts and counts on weekly chart are continuation of monthly chart. Evvery big wave consist of small inner waves and every smaller wave is part of a big wave and is a part of biggest waves cycle started from 1995. This is the only way of Elliott Wave Theory analysis whenever you are analyzing any script first time.
And there is example of every pattern in this report specially “Leading Diagonal”, Ending Diagonal” and Triple Zigzag. Just read the book again and try to understand deeper dimensions of Elliott Wave Theory.
Note: I will mot be able to update my “Daily Elliott Wave Analysis Report of Nifty” on my website for next 01 months as I am out of station. It will be sent to clients/subscribers only by email.
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