Nifty Impulse Elliott wave pattern and Time Cycles
Jan 10, 2022
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Elliott wave gives the GPS of market and probable path prices can follow. This is a strong forecasting method that can give good risk reward trade setup.
However, one should not enforce what markets should do but use this tool to constantly evaluate and see if prices are moving as per the expected path or forming some other pattern.
Below is the chart of Nifty on a 15 minutes time frame along with short term Time Cycles of 87 period.
Nifty 15 minutes chart:
Elliott wave analysis:
Nifty showed impulse pattern rise from the lows of 16740. An impulse pattern in Elliott wave consists of 5 waves on upside and are labelled as 1-2-3-4-5. It indicates that the overall trend is on upside if impulse is moving higher and give the possible targets based on Fibonacci extension. Over here we can observe that the 3rd wave is extended and subdivided. This wave 3 itself is further bifurcating into 1-2-3-4-5 pattern and prices are currently in wave v of (3).
Fibonacci Extension – Wave 3 is usually the longest and travel to the extent of 1.618 times of wave 1. We can see here the extension target of wave (3) to that of wave (1) is near 18042 levels. However, this is just a guideline and not a rule but one gets a probable target for the ongoing trend.
Time Cycle of 87 period – To further increase conviction and timing the entry to trade we are using 87 period Time Cycles. This suggest that every 87 period the time on 15 minutes chart turn on the upside and the same can be seen even now when prices turned up from 17750 levels. The two vertical red lines show the zone of Time cycle low.
In a nutshell, by combining Time Cycles along with Elliott wave it is possible to derive trades with prudent risk to reward setup. As per the above chart 18042 is the next level to watch and on downside wave iv low near 17700 is important support. Breach below this low will indicate entire wave (3) is over and wave (4) correction is starting before the up move resumes again. Basis of this information Option traders can form trading strategy of buying ITM call option and selling OTM calls.
By combining Elliott – Neo wave one can form a clear trading strategy and plan and derive target levels using Fibonacci. Master of Waves (MOW) Live Event on 15th – 16th January, To be a successful trader you need to have an Edge. Along with Neo wave, we will also discuss Time cycles to time the trade to the very hour. Are you in with me! Fill out the form for more details