01 June 2016: Nifty Elliott wave analysis: Time correction continues as an impact of sharp rally. As long as Nifty is above 8000, we cannot see down.

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

For 01 June 2016: -

On 31 May 2016: FII Net Bought – INR 114.52 Crs:  DII Net Sold – INR – 60.28 Crs

Well, so far nifty is on consolidation. I am marking a crucial moving average on chart, i.e. 7EMA. This is running at 8040 levels now. As long as it is above 8040 we cannot say for any reversal in short term trend. It is consolidating at higher end as of now. What is going to be outcome of this consolidation? Well, basics are suggesting that if index stay higher after a rise then it is likely to move up further.

For today’s trading session we can expect the market to open flat to up. So far, the week is dull. We have not traded index so far this week. Even for today I have same expectation. Market may remain dull with trading resistance at top near 8240-8270 levels. If I see it going towards my desired resistance then also I have scope of trading long. Well, but I am also not very confident and hence I have not added any position. Choppy days are cause of low resistance and market may dull even today.  

Do not misinterpret. I gave a long term trend as down from more than a year back. Nifty hit 9119 and then I issued for a long term top. Nifty hits a low at 6825 on Budget day this year. After such down side, wave theory had suggested for comparable recovery with three big possibilities for retrenchments, first to come at 50% at 8000, 61.80% at 8250 and 76.40% at 8575.

101%, I retain my view for long term trend down but that does not says that we cannot interprets for short to medium term of recovery. This recovery was bound to come and it is coming to make a wave [B]. Now, just imagine the magnitude of wave [C]. Higher the retrenchment, bigger fall will hit in future. If this wave [B] tries to end up near 9000 then 9119 may not be visible for many years. So, where is my long term target on Nifty? Well, it is in the zone of 6000-5500.

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Strategy for Nifty June future – I have not trade so far for the week and I am on wait and watch mode. This market may generate 200 points Up or down moves. Let us see how it behaves at top. I am expecting levels of 8240 or 8270 as a top before correction but we failed to see any such decisive move.

BANK NIFTY – This is index is disappointing at top. Well, as long as it is above 17500 we may see up but this is definitely tired. In any correction on index, this index will fall more. This may be my first choice for shorting if I opt shorting today with resistance at 17700. Do not think to buy at all. Let it fall first to trade short.