26 February 2016: Nifty Elliott wave analysis: Do not buy anything before Union Budget on Monday. A disappointment can cause 6800-6750 levels on Nifty.

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

For 26 February 2016: -

On 25 February 2015: FII Net Sold – INR 1465.68:  DII Net Bought – INR – 806.97

Stock market never likes a populist budget and so it was Rail budget presented yesterday. Once again it was a talkative budget with no roadmap for funding. I am expecting this trend by NDA government to continue for Union Budget too. Indian economy desperately needs a reform based budget with hard decisions. Clock is ticking for Indian economy with back to back fourteen months slide in export figures.

For today’s trading session, I am expecting a gap up opening as suggested by SGX Nifty after a good rise in US market. As of now, Nifty will face resistance at 7100 levels before budget. If budget disappoint on Monday then one should prepare to see as bad as 6800 to 6750 on Nifty which may be a most likely situation.

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 March future – I want to go bearish before Union Budget. I may opt to buy few out to money put in today’s rise. The most crucial hurdle for Nifty will be at 7070 and then at 7100 levels. If it goes above 7100 then I will go to play a gamble and will buy some out of money put for Monday. I have no intension to trade Nifty future today. Let us see on signal.

S&P 500 (USA) – I said for buy in dip and it has crossed 1945 level. This makes a short term buy on S&P. As long as it is above 1950 we can expect levels of 2000 to be tested. I do not recommend short easily as long as it is above 1945 levels. Let us see if this breakout can get a good confirmation today. If this happens and follow up buying hits then we can expect a good next week.