17 August 2016: Nifty Elliott wave analysis: My conviction may be less but I will prefer to trade long only.

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

For 17 August 2016: -

On 16 August 2016: FII Net Bought – INR 684.73 Crs:  DII Net Sold – INR – 108.98 Crs

This is definitely an odd pattern to trade where index used to get support at lower levels and equally facing resistance at higher levels. Well, this is part of trading life. Technical charts are still suggesting that we will live in same range. I am still optimistic for attempt for some more rises. My conviction may be less this time. Wave pattern is still giving some hint for rise and hence I have traded long in the last trading session.

For today’s trading session I am expecting market to open on negative note as suggested by SGX Nifty. Suppose market stay range bound near lower levels then I will not participate index trading for today. We have already traded long in the last trading session. My view is that we can expect support in the range of 8590-8550 levels. Market may use to see frequent pull back.  

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 still use the word of optimism. Technical charts are advocating for some more bullish attempts. I bought Nifty future @ 8620 yesterday and booked my profit at 8665. It may be small 45 points but good enough for the day. Take a note that we will again get support at 8610 and the next support may be at 8580. Will I buy again?   

BANK NIFTY – I still repeat, unless it go above 19200 I prefer to avoid. My study remains same. 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.