27 April 2016: Nifty Elliott wave analysis: If 8000 has to hit then today is BEST day. Will this give short covering rise?

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

For 27 April 2016: -

On 25 April 2016: FII Net Bought – INR 222.34 Crs:  DII Net Sold – INR – 747.95 Crs

This is a simple short covering which came in effect once Nifty has crossed 200 DMA yesterday. For whole month shorts were trapped and they make a forceful exit. Hence, we saw a good rise. Whatever rise wants to come it should come by short covering towards the end of this expiry. Take a note that it is too early to name as buying at top.

I must say that as long as Nifty is above 7800, it is giving bullish pattern. Equally above 200 DMA i.e. 7870 is adding strength near to psychological 8000 mark. I make a good exit yesterday on the anticipation of this short covering.

For today’s session, keep an eye on 8000 levels. If 8000 has to come for Nifty then today is best day to hit and most desirable day to react. Take a note that 7980-8000 is a zone of resistance and I am not claiming anything before that. I have no position to react. Note that Nifty makes double bottom on hourly chart.

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 May future – Yesterday, I traded long which was eventually came on the cross above 200 DMA. It was purely backed by sensing short covering. For traders, no rally is better than short covering rally. I always used to enjoy this. 8050 is a key threshold level to react. Let us see what is going to happen.

BANK NIFTY – I said yesterday that some technical facts are indicating that above 16800 we may have reasons to believe for 17000. We got this target. Can it sustain above 17000? I must say that short covering can cause a hit for 17300 levels. Technical support will emerge at 16800-16850 levels. I may not opt to trade this index. I am focusing more on Nifty.