05 April 2016: Nifty Elliott wave analysis: Can we get a short term top with rate cut? Yes, it can!!!

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

For 05 April 2016: -

On 04 April 2016: FII Net Bought – INR 236.82:  DII Net Sold – INR – 333.76

Finally, we are on for RBI monetary policy day. We all are hoping for rate cut. Some may say 25 bps and some may say 50 bps. I believe that we have a chance of hitting 7800 and a short term top if it has to come today.

Can it advance above 7800? It may be reality but I see a lesser chance. Technically, I see a possibility of top here and there around 7800. If top come on policy day then one should not try to touch in recent fall.

For today’s session, suppose if it stays below 7700 then avoid trading long ahead of many big events. I am still not bearish. I am just avoiding traded at top. Who knows I may get trap in long. Below 7680-7660 we may see weakness.  I have already advised caution yesterday on my twitter.

A reader has suggested deleting the paragraph given below. I must say that these are long term charting view with warning sign and hence it deserves to be part of everyday article.

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 April future – I am keeping my analysis same as Nifty. I am avoiding index trading mode as it may not give clear direction although I am anticipating some rise as long as Nifty April future stays above 7740. Can give a test of 7800? Hope so!!! If it fails and breaks 7700-7680 then a fall is possible.

BANK NIFTY – My studies remains same. It has again closed on logical resistance is at 16150 where it has closed on last Thursday. I am not saying short but I have no good reason to buy again. Let us see. We may see resistance at 16300 as it has shown yesterday. Do not short but equally do not buy. Wait for RBI Policy or some strong trading signal. It may be a buy above 16300 !!!