JPASSOCIAT- Cracked 18%. It was mentioned with my Elliott wave study. If you miss, read this chart again !!!!

04 September 2014: Nifty Elliott wave analysis: NIFTY has almost formed a top at 8142. Now, if it stays below 8080 then we can expect a correction. It has short term support at 8000-7970. Weak mid cap will see massive fall in coming days.

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

For 04 September 2014: -

On 03 September 2014, FII Bought INR 1288.57 crs and DII Sold INR 469.69 crs

Nifty hit a high at 8141.90 yesterday and closed above 8100 marks. So far, daily chart has not shown any sign of weakness while hourly chart is giving extremely over bought signal. It has done its Elliott wave projected target which was hinting for 8132 to 8150 levels.

This rally has begun from 7540 and extended for almost 600 points without any price correction. There is not the usual kind of moves but Indian market is known to do this kind of odd movements. Current one has extended too much for now. It is giving a sense that we can never expect even negative closing. Remember, Indian market always falls people expect least about it.

I do not like to trade this kind of rise as it betrayed traders anytime without any good sign of warning. If a natural correction has to come then it will come by its own. I have just added few put options and I will wait for desired correction. Based on my chart, this market has already done its best possible target at 8132 to 8142.

Here is some threshold – note a level of 8080. If Nifty starts sustaining below 8080 then we can see a move towards 8000 levels. It’s conclusive that 8000 to 7970 will act as short term support. Now, its momentum near 8000 levels which will decide whether it will safe or break.

My most desired theory is – we can expect correction if we get bear gap down. Suppose, Nifty opens down by 20-30 points and gap does not fill for entire day then it will generate a high possibility of correction in the days to come. Hence, that given better signal to add short in futures.

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Strategy for Nifty September future – Nifty September future may open down as indicated by SGX Nifty. It does not matter where it opens. What matters is that will it sustain below 8100 levels. If yes, then we can expect price correction. I will plan to add shorts for intraday if it breaks and sustain below 8100 levels. It may immediately give up 30-40-60 points.

S&P 500 (USA) – It hit a high at 2010 almost and then slipped over half a percent. It is again confirming that S&P is on possible top. I need to add that a good confirmation will come once S&P slips below 1990. One can take risk trade with shorting these current levels as suggested yesterday. Safe traders can add short below 1990 levels. Result should be good and first target comes at 1970 which should be immediately achievable. As of now 2010 will act as resistance. Though, I cannot deny a move towards 2020 as long as it is above 2000 marks.