11 February 2016: Nifty Elliott wave analysis: Will support at 7200 hold? It need to hold yesterday’s low of 7177 to see any bounce.

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

For 11 February 2016: -

On 10 February 2015: FII Net Sold – INR 751.33:  DII Net Sold – INR – 196.92

Yesterday’s dent was banking collapse. NPA concern remains governing for banking sector. We saw a good bounce for intraday about 90 points but this got sold at higher levels. Technical charts were suggesting for support at 7200-7230 levels. It got a closing in the same range. Big question is that will it move higher from here or will it fall more. If breaks and sustain then 7100 is also possible.

For today’s trading session, I am expecting market to open with gap down although it may not be as big as reflected by SGX Nifty. We are now just few trading sessions away from Union Budget. Market may try to take a call for budget. Budget moves are usually counter long term trend. Hence, it may be up this time.  If it has to bounce then time is on and levels are also on. Be cautious.

Let me clear what weekly charts are saying. A full 1500 points of fall is possible from 7500 levels. I have no idea if it gives 100% result what it is showing on theory but the target lies near 6000. Sorry, if words hurts you but this is what I feel. I do not see Nifty going at 8000 anymore in easier way.

It looks like H&S pattern is taking its effect. Well, if H&S pattern goes on its true mode then 7200-7100 is the possibility. Meantime Nifty is over sold for short term and intraday chart. This says that market may ignore MACD positive divergence and sooner or later it will hit 7200-7100 levels. After that 6500 will be the figure which people will talk about.

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Strategy for Nifty February future – Nifty Future has shown some respect for 7200 but this has not shown any good sign of recovery. Bounce came as expected in second half but after a dip. For today’s session opening goes around yesterday’s low. If it shows respect for 7190 then we can expect another possible bounce. If not then some more pain left for market. Do not short lower levels after gap down.

S&P 500 (USA) – It took a jump to move above 1875 but slipped to see lower close. I have already said for not to buy these bounce unless it spends time above 1875. It is hard to say how many attempts it will take to hit or break 1875 levels. My call is to buy only and only if it can sustain above 1875 levels. So far, trend is down in limited range.