12 August 2016: Nifty Elliott wave analysis: So far, 8550 support is working. If it works then small recovery is possible today before long weekend.

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

For 12 August 2016: -

On 11 August 2016: FII Net Bought – INR 608.35 Crs:  DII Net Sold – INR – 621.65 Crs

We got a low at 8540 on Nifty and then a bounce. It is encouraging pattern and hence I moved out of my short deals. Well, it is still not above 8600 and hence it is just my optimism and I have less support from technical to say a buy although I have added long in dip. If it can sustain above 8620-8630 kind of levels then we can expect some recovery.

For today’s trading session I am expecting market to open on flat note. It will take support at 8550-8540 levels. We may see a possible recovery at current levels. If things can sustain above 8620-8630 then we may see an attempt of revival. Remember, market will go on long weekend as we have holiday on Monday. Avoid trading on choppy moments. It may go choppy too.

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.

Strategy for Nifty August future – I came off my shorts and I have added long in dip. I am expecting a day of recovery today. Technical support is at 8590. On higher side it needs to see it sustaining above 8650 to say words of recovery. It may not be great trading day due to long weekend. Technical charts are giving very early sign of buy but it still requires more confirmation.

BANK NIFTY – It is saving support at 18400 by long way although recovery form bottom was not as good as nifty. Still, support is working so far. Technical charts are saying that if t saving 18400 then do not short. On higher side 18700 is a decisive level for bulls. If it breaks the resistance on higher side then we can expect another bullish attempt but that also may not be impressive. In all, this index is still not my favourite for trading. I focused on Nifty only.