23 April 2015: Nifty Elliott wave analysis: Recovery will face litmus test at 8470-8480 levels. Recovery can sustain for 3-5 days at the maximum.

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

For 23 April 2015: -

On 20 April 2015, FII Sold INR 1506.86 crs and DII Bought INR 962.50 crs

We saw a low at 8284 levels before bounce. Finally we got closing at 8429 levels. This is a strong intraday reversal. We utilized most of the rise from lower levels with massive gain as we took long on Nifty future from 8315 levels. On 27^th March it had a low of 8269 and hence the zone of 8269 to 8245 was zone for support. Take a note that 8245 is 200 DMA support.

I still say that Nifty is forming most brutal H&S pattern of recent many years which will cause further fall on index in coming days but right now a price recovery is on. We got recovery after five days of consecutive fall. If you take magnitude wise it was from 8844 to 8284. It was 560 points without a single recovery.

For today’s trading session, I am expecting positive opening. Take a note that this recovery can hit a halt at 8470 to 8480 levels. So this is going to be first litmus test for recovery. I am issuing a strong caution. This rally will truncate at higher levels. This recovery can sustain for 3-5 trading sessions at the maximum.

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Strategy for Nifty April future – We should get a start near 8500 levels. We will get trading support at 8450 to 8430 levels. I can repeat that no higher levels are safe anymore due to possible brutal H&S structure. I prefer to buy-in-dip but majority of decisive will take be taken during trading hours. We have some forwarded long.

S&P 500 (USA) – This is consolidation above 2100 levels. I can say that US indices in the tug-of-war mode where bulls and bears both try to show their power. In normal condition, technical traders should restrict their activity near such levels. My call is short near 2110 with stop loss at 2120 and wait for decisive mode. I am just saying that if this is range bound market (as seen from past 5-6 months) then short the top end of market. Will it cross 2120?