18 July 2016: Nifty Elliott wave analysis: High chance of consolidating week ahead. 8600 should invite profit taking sooner or later.

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

For 18 July 2016: -

On 15 July 2016: FII Net Bought – INR 1461.26 Crs:  DII Net Sold – INR – 1033.97 Crs

Nifty has just turned shy near 8600 levels and this is what I was expecting. So far, it is looking to consolidate near the resistance of 8575. It may see some profit taking in this range in this process of consolidation. Technically, as long as it is above 8460 we cannot see any brutal sign of reversal. It may not fall below 8460 so easily but profit taking is a part of rising market too.  All eyes must be on monsoon session of parliament now.

For today’s trading session I am expecting market to open higher near 8550-8560 levels. Afterward it will see resistance emerging at 8600 levels. Do not attempt fresh long unless it go above 8600 levels. I am sure that we may see profit taking this week but I am unable to spot exact time. Let us see what is coming. Try to restrict your activity if fall does not come.

After looking to this structure and then way market has refused to break below 8000 even in panic we can say that market is preparing something big. This big think can be as big as 9000-9100 levels of Nifty. I see such great possibility hence bears must be cautious.

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 July future – Opening is expected around 8570 levels. After that it will get support at 8530 levels. I do not see much chance of trading on long side unless short covering rise hit. Below 8530 we can expect profit taking to emerge. Technical charts are suggesting that it should face resistance at 8600-8610 levels. Do not try adventurous long unless it go above 8610-8620 resistance marks.

BANK NIFTY – It has done 19000 levels which were expected and now it may see profit taking but there is no such sign yet. This is suggesting me to be very cautious. Well, if it has a choice to be compulsive long then it is definitely my choice to buy banking index only. Technical support is at 18700. As long as it is above 18700 we cannot see any decisive profit taking.