17 July 2015: Nifty Elliott wave analysis: After yesterday’s breakout, follow up buying can trigger massive short covering anytime. Technical support – 8570-8540

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

For 17 July 2015: -

On 16 July 2015, FII Bought INR – 745.81 crs and DII Sold INR 98.51 crs

Based on chart we got a clear breakout as expected from past few days. I started trading long from 8350 on the anticipation of this breakout to for ‘reverse H&S’ pattern. Here is comes. Now the next important thing is that it just needs to spend some time at current levels. If I am right then we can expect at least 8800 levels on Nifty. In best scenario we can see levels of 9000 too.

Nifty has surpassed two important points for rally. One was at 8500 and next was at 8570. We didn’t even saw a 30 points pullback anytime during run from 8500 to 8570. I tried one small short but failed. This is justifying support and a possible run up.

For today’s trading session, I am expecting a positive start which will bring optimism. Today is the last trading session of the week. I am expecting some consolidation in first half which is very usual. Anytime and any day we may see a big short covering. This short covering used to come to take the majority of bearish people from market. Technical support wil be at 8570. On higher side I expect 8800 by next week.

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Strategy for Nifty July future – We tried a small short yesterday which failed. Then we again went on buy side which has given some good gain by close. I still expect market to go higher. I am optimistic about 8800-8850 for next week. Only concern is that so far this is a straight line rise. Technical support is at 8570-8550 levels. There is no threat on chart. It is a breakout situation which will get confirmation today. If follow up buying comes then we may see a short covering rise.   

S&P 500 (USA) – It moved further and came at 2125. This move has successfully predicted. Take a note that this bounce is coming from 2045 and extended much.  Now all eyes must be on 2135 levels. Will it give a breakout or will it turn shy again. I cannot say with any degree of confirmation. This is something which will happen by its own. Wait and watch is suitable strategy.