Nifty opened lower at 11905, bounced to register day’s high 11931 but failed to sustain at higher levels and declined by 90 points to register day’s low 11836 and finally closed 67 points down at 11861.
Friday, overall 11697-11484 was major support and 11484 for major downside trend reversal point. 11916 was immediate breakeven point and 11864-11842 was next short term support after 11916. Any short term downside reversal was expected after break below 11842 only.
Nifty broke 11916 at opening and decline further to enter is short term support 11864-11842. 11826 was suggested as fresh Trend Reversal Point/Stoploss by Live updates sent during live market hours through WhatsApp Broadcast. Now, let’s have a fresh look at latest charts for further scenario.
This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.
This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.
The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.
So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be completed at Irregular Correction at 10004 and wave ‘5’ may be in progress. Wave ‘5’ achieved minimum projections after breaking above 11761 whereas next 61% projection is placed at 12689 which may or may not be achieved. Wave 5 achieved 12041 but pattern doesn’t seem completed.
So, let’s analyse the progress of wave 5 started from 10004 separately to calculate internal moves.
This is again daily time bar chart of Nifty covering bounce after 10004 which I marked as start of inner wave ‘5’ of [v] on daily chart. Again, there is no change in wave counts on this chart.
It seems, inner wave (1) of 5 completed from 10004-10985, wave (2) may be completed from 10985-10585 Double Irregular Correction and wave (3) may be completed from 10585-11856.
Wave (3) is less than 161%, thus not extended. So, wave (5) needs to be extended.
23%-38% retracement of wave (3) is placed at 11697-11484. So, 11697-11484 is major support and 11484 is major trend reversal point on downside. Nifty can bounce minimum 778-1258 points from 11697-11484 range but if it breaks and stay below 11484 can result in big decline towards 10585-10004 again.
Now, let’s have a separate look at progress of wave (4) on lowest possible time frame.
This is 15 minutes time bar chart of Nifty covering decline from all time high 12041 which I marked as start of wave (4) on daily chart. The decline from 12041-11614 is sharp and very last leg from 11859-11614 looks like a 3 waves (abc) move. So, we can’t ignore the possibility of Irregular Correction here.
It seems wave (a or 1) completed from 12041-11779, wave (b or 2) may be in progress as big Irregular correction with inner wave (a) completed from 11779-11859, irregular wave (b) completed from 11859-11614 and wave (c) may be in progress.
Within wave (c) of (b or 2), it seems inner wave (i), (ii), (iii) and (iv) may be in progress from 11958.
Within wave (iv), it seems inner wave (a) completed from 11958-11864, (b) may be completed from 11864-11949 and wave (c) may be completed at 11836 or still in progress. Normal 100%-123% projection for wave (c) is placed at 11855-11832 and Nifty already entered in this range.
38% retracement of wave (iii) of (c) is placed at 11842 whereas 38% retracement of progress of whole wave (c) [11614-11958] is placed at 11826.
We are taking downside Breakeven/Trend Reversal Point at 11826 (rather then 11842) because 123% projection for inner wave (c) of (iv) is falling below 11842 (at 11832). Nifty if breaks below 11826 can result in further decline towards major support 11614-11484.
If wave (iv) already completed at 11836 then Minimum 38%-61% projection for wave (v) is placed at 11967-12048. So, 11967-12048 is minimum target range for completion of wave (v).
Note: Irregular Correction is not a simple pattern and there is always a hesitation when there is Irregular Correction or Complex Correction. So, we will concentrate on bounce after 11614 for very short term outlook and assume the trend a positive as long as Nifty is trading above 11826 and think of downside reversal after break below 11826 only.
Overall, Nifty is trading in support range 11864-11842 and 11826 is Trend Reversal/Breakeven Point. Nifty has possibility to bounce towards 11967-12048 without breaking below 11826. But Nifty if breaks below 11826 can result in further fall towards major support 11614-11484.
11614-11484 is major support and 11484 is major Trend Reversal Point. Nifty can either bounce by minimum 778-1258 points without breaking below 11484 OR can decline big towards 11585-10004 if breaks/stay/close below 11484.
We need to keep all these conditions in mind while deciding next trade.
Trading Points of View:
11864-11842 is low risk buying range with 11826 as Trend Reversal/Stoploss whereas 11967-12048 is expected targets range on upside.
We can think of selling after break below 11826 expecting targets 11614-11484, but entry levels and stoploss can be calculated after breakdown only.
11614-11484 is low risk buying range for Positional Longs at this point of time which is subjected to change.
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