19 August 2016: Nifty Elliott wave analysis: It may be dull end for the week but Bank Nifty is on breakout mode.

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

For 19 August 2016: -

On 18 August 2016: FII Net Bought – INR 162.17 Crs:  DII Net Sold – INR – 14.42 Crs

If we see the charts on broader sense then one can see that it is almost of 78% retrenchment of long term fall which we have seen from 9100 to 7800 almost. I named this as long term corrective wave B on which I was extremely bullish from 8000. Although I picked many investment stocks in dip around 7000 levels. Take a note that I am still firm on my long trend as down only unless it really turn strong after crossing past all time high.

For today’s trading session I am expecting market to open on negative note as suggested by SGX Nifty. This may not be the time to trade as we have higher chance to see a choppy trade on higher levels. Technical trading charts are still bullish irrespective the signals from long term charts. How to trade today? One can expect resistance at higher levels. Trading support will be at 8620. I may prefer to avoid today’s market unless I get some strong signal to trade. If Bank Nifty supports then Nifty can extend as high as 8880 levels.

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 – We may have dull to negative start but we may not get decisive start to trade. If market remains choppy then avoid today’s trading session. I am expecting resistance at 8710-8720 levels. If it does not make at high then a dip is possible around 8620 as a target.  

BANK NIFTY – It has crossed above 19200 and shown better strength. It has almost gained over a percentage. This makes this index on breakout mode and hence I am optimistic about Nifty too. Charts say that as long as it is above 19200 we can a possible strength up to 20000 or some nearby levels. How will it come?