NIFTY JAN Update - Elliott wave analysis
- LeadBrains
- Jan 2, 2017
- 3 min read
Continued from the Post will nifty sustain 8000 levels?
This part is the third phase of the analysis and this will reveal the High probability move in future & describes short term direction too!
The reason behind this analysis has been supported by various factors,
THE NEED FOR TRIANGLE ?
Triangle is formed as a result of consolidation psychology
The supportive factors,
Wave (2) is so simple that it lasted just more than a year. This leaves the wave (4) to be complex & triangular formation @ wave 4 position is favored, irrespective of the asset.
Wave (4) can retrace to decent amounts - say here it is 50 & the target is reached but anything more than 50% R is way too more for a retracement following wave (3). Therefore, this retracement would be revolving within the limits of 50% R - this eliminates the combination/ double three scenario & leaves us with only option - TRIANGLE.
Moreover, the Geo-political, DE-monetization concerns doesn't support either direction & this leaves the markets clueless & hence the consolidation is the only thing that keeps the markets spinning but without moving anywhere distant.
LET's ANALYSE THIS TRIANGLE
Having to decide this as a triangle takes a bit of experience & risk, but definitely the risk is comparatively less than other scenarios & well compensated too!
Wave A took out 50% R levels!
Wave B is a retracement to wave A but not related to any guideline & definitely finished less than wave A - this confirms a triangular structure.
Wave C is currently unfolding & is expected to be .618/.786 times wave A.
[we will follow up the move & publish the levels for wave D & E, as market progress]
LEVELS TO WATCH!
Wave C is definitely not completed!
Take a look at the c's profile - how it has reacted to wave A's retracement ratios
The Pre-50% is supported by the static support zone on left.
we can expect wave C to be firmly supported by either .618/.786 levels
Please refer to the video for further clarification, if there exists any confusion/misunderstanding, do use the comment section (below).
STOP LOSS LEVELS
Entering a trade at this instant will entitle high risk, to understand how to mitigate the risk? read below,
The risk here is maximum, because the SL will be @ 8963 / C's top - this level is for long-term traders / positional traders.
For swing trading setup - the SL could be 8737.
Having understood the direction in various scenarios,
The short-term direction is clear, downwards; Either for completion of C of a triangle/wave Y of a combination / wave 2 of new cycle degree (low probable).
Is it wise to take a sell position on NIFTY @ this area?
There are things to be considered before answering this question, the daily time frame has not been analysed yet,
In OUR post NIFTY JAN UPDATE-DAILY ANALYSIS, we have analysed daily time frames in detail - this provides a good price for entry & mitigates your risk!
Moreover, a double confirmation is pre-requisite before a prefect trade! which is linked given in our forum post, here.
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PLEASE NOTE:
Great News - We will follow up this analysis in weekly time frame & publish any updates in forum.
The analysis will be exclusive to brains' newsletter subscribers & will be posted elsewhere only after 2/3 days. Please ensure that you sign up for forum & newsletter!
Thank you for reading this article.
Regards,
LeadBrains
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