25 August 2016: Nifty Elliott wave analysis: Bullish formation Vs Bearish formation? Avoid trade on expiry day.

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

For 25 August 2016: -

On 24 August 2016: FII Net Sold – INR 39.28 Crs:  DII Net Bought – INR – 129.18 Crs

I normally do not trade expiry day and today it turn special to avoid. Nifty is forming narrowing wedge formation and this is definitely not a good situation. Market used to take unpredictable turn in all such moment. Market will face resistance at 8670-8700. In the lower side it will get support at 8600-8580. I strongly suggest avoiding such market.

For today’s trading session I am expecting market to open or flat note. After that it has higher chance of trading flat. If things favours then market can see a possible fall but this time I am giving possibility as 50-50 for bulls and bears each. If this market were looking for a fall then it should have given fall by yesterday only but it has closed on high point. This is showing that bulls are giving their best.

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 September future – We will see market opening above 8700 but I will not prefer to trade today. It is equally true that in normal circumstances it is said to be bullish but wedge formation is also alarming. Technical charts are suggesting for support at 8650- 8640 levels but support is too far. On higher side 8750-8760 is still achievable.

BANK NIFTY – This index is convincing me that we may have very limited rise on higher side even after breakout situation it is not moving higher. Let us see how it trade today. My study and levels remains same.  Avoid present breakout now for long. It has definitely not displaying the kind of strength which I was expecting above 19200. Fine, as long as it is above 19200 I may not opt shorting. Well, but below 19200 I will definitely think to short this very seriously. Technically, 19600 may remain untested. We will see resistance emerging at each higher level.