Nifty opened higher at 11999 and bounced further to register day’s high 12039 but failed to sustain at higher levels and declined sharply by 210 points to register day’s low 11829 and finally closed 23 points down at 11922.
Friday, 11917 was downside breakeven point and bounce towards 11971-12002 was expected but 12053 was good upside resistance. A small or big decline was expected before breaking above 12053.
Nifty opened at 11999 and bounced till 12039. Live updates were sent during morning hours stating that 12053 is still good resistance and 11990 is immediate downside breakeven point. Fresh buying must be avoided and selling can be done after break below 11990. Nifty declined by 160 points within 10 minutes after breaking below 11990. 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 [38%-61% projection for wave (5)] from 11697-11484 range but if it breaks and stay below 11484 can result in big decline towards 10585-10004 again. Nifty already bounced by 300 points from 11697-11484 range.
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 which is making it difficult to identify exact pattern, so we can’t say if wave (4) is completed or not.
Fibonacci Ratios wise, wave (4) entered in 23%-38% retracement range and Nifty bounced towards high again. So, we can ignore the move from 12041-11614 for time and need to concentrate on bounce after 11614 to calculate further move.
From 11614, it seems an Impulse completed from 11614-12039 as marked on chart. This impulse can be wave (A) or (1) or (C) of Irregular Correction, we can’t say exactly because previous wave is not clear. This Impulse is retraced by 38%-61%.
The decline from 12039-11829 looks like a 3 waves which I marked as wave (a or 1), (b or 2) and (c or 3). Again the move is very sharp so there is low confidence.
Fibonacci Wise, 38% retracement of wave (c or 3) is placed at 11909 and same is already broken, so Nifty is in positive zone till now.
Overall, there is confusions on this chart because the first decline from 12041-11614 (on election result day) and last decline from 12039-11829 (decline of 200 points in 10 minutes) is very sharp making it difficult to identify exact pattern.
So, let’s have a separate look at bounce after Friday’s low 11829 to check if we get any clues of next move.
This is 5 minutes time bar chart of Nifty covering bounce after 11820 which I am analysing independently.
There is sharp bounce from 11829-11955 followed by corrective (abc) decline which retraced the bounce by exactly 61%. So, the impulsive bounce from 11829-11955 can be marked as wave (a or 1), corrective decline from 11955-11874 can be marked as wave (b or 2) and wave (c or 3) may be in progress.
The pattern of wave (c or 3) is very interesting. It looks like repeated upside Impulsive followed by downside corrective wave. If it is inner wave (1) and (2) of (c or 3) followed by inner wave (i) and (ii) of (3) followed by inner wave 1 and 2 of (iii) then there can be good gap up opening followed by big sharp bounce.
If the pattern I am identifying is correct then the bounce can be sharp and big because completion of wave 3 followed by (iii) followed by (3) followed by (c or 3) can form a huge sharp wave.
Possibility of upside Complex Correction is also negated in last 5 minutes after Nifty breaking above upper line of triangle. This condition is also supporting the possibility of bounce.
Possibility of big sharp bounce will get negated if Nifty breaks below 11896 and whole pattern will get negated if Nifty breaks below 11874. On the other hand, Nifty needs to bounce sharply for big bounce, otherwise any delay in breaking above 12041 can change the pattern.
Overall bigger pattern is not clear but internal pattern is indicating big sharp bounce in coming sessions. And if we combine big bounce with bigger wave patterns then there is possibility of even 778-1258 points rise in coming days.
Overall for short term/Intraday, Nifty is indicating a sharp bounce of 150-200 points in next 1-2 sessions without breaking below 11896-11874. I am not able to identify any other pattern yet.
But Nifty if breaks below 11874 then we need to look for the possibility of any other pattern.
We need to keep all these conditions in mind while deciding next trade.
Trading Points of View:
The pattern formed at closing is indicating a gap up opening followed by sharp bounce, so short term trading strategy must be “Buying on Dips” as longs as Nifty Trading above 11896 with 11874 as stoploss.
Nifty if opens gap up then fresh support and downside breakeven point will be updated during live market hours.
Conditions are good for buying Options because bounce is expected to be sharp if we are right at identifying the pattern. Otherwise decline must also be sharp if I am wrong at identifying the pattern.
Further, I will update about formation of any important internal pattern or any change in trend/pattern/important levels or fresh support/resistance/breakeven point during market hours by WhatsApp Broadcast.
Please Like my Facbook Page “Sweeglu Elliott Waves” to get my daily market and Nifty Updates. Link to the page is https://www.facebook.com/sweegluEWT