16 September 2014: Nifty Elliott wave analysis: Below 8050, it should take a dip but that dip is not impressive yet. 20 DMA support is at 8010 levels. One must watch 8010 very carefully. H&S target – 7920!!!

You must read previous articles and watch the given chart carefully to understand this article completely.

For 16 September 2014: -

On 15 September 2014, FII Sold INR 74.59 crs and DII Sold INR 74.49 crs

It has closed below 8050 levels after 10 trading sessions. Well, it has not shown the desired profit taking yet. We have H&S pattern on Nifty daily and hourly chart with a price target of 7920 levels. In between we have 20 DMA support at 8010 levels as shown in the given chart.

It has already broken and sustained below 8050 and now the next want from chart is that it should sustain below 8010 levels too to give a dip for 7920. I will be happier if I get this as gap down. I have already expressed my view that 8180 may be a short term top. This view was generated based on Elliott wave theory. Same, wave pattern too is suggesting that a dip towards 7900 is very much possible.

Still, there are many mid cap and small cap stocks which are flying with big alarm. Those may be to trap bulls or small investors. I strongly suggest avoiding whole pack. You may miss few opportunities but you will be safe.

For today’s trading session, opening may come in the range of 8020-8010 as suggested by SGX Nifty. After that, keep a close watch on 8010 to 8000 as support. If it sustain below 8000 then we may see some ‘giving up of bulls’. Well, it may not be that easy to get.  

Yesterday was first day after long time that we got closing near day’s low.

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Strategy for Nifty September future – Nifty September future is down by more than 25 points right now. After opening, it will get support at 8020 to 8010 levels. Below 8010, bulls should give up. If trades sustained below 8010 then we may see quick fire towards 7050 levels. For put options, premium decay is my concern due to time factor. Unfortunately, I have put only.

S&P 500 (USA) – It has broken and bounced from a level below 1980. So far, this is weak bounce from low. I feel that this market is heading lower at least to touch my mentioned target of 1970 at least. If it breaks 1976 then it has a scope of testing levels of 1956. On higher side 2000 will act as stiff resistance. I still say just stay short or short on any bounce.