30 August 2016: Nifty Elliott wave analysis: No great answer so far for possible profit taking but be cautious on long deals. Profit taking is near.

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

For 30 August 2016: -

On 29 August 2016: FII Net Bought – INR 286.52 Crs:  DII Net Bought – INR – 17.49 Crs

Have a look at the pattern generating on Nifty chart. This is turning narrowing triangle and it stay in the range from past 45 days. This kind of zig-zag move is most unfavourable pattern to trade. It is not that the range is small but it is because of the reason that it can behave unpredictable way at each end on the anticipation of breakout or break down. Analysis is simple I do not want to add short at lower end unless it breaks 8540 levels with conviction.

For today’s trading session I am expecting market to open positive as shown by SGX Nifty as opening cues. This may happen backed by global cues. Technical charts are suggesting that it may again hit levels of 8650 kind of levels again. It is not easy to predict up or down. My anticipation is still same. Market should go down for once from higher side. Will it break 8540 sooner? Do not be active on Index unless strong signal emerges. There is a lot of noise as technical signal.

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 – I do not see reasons to trade on Nifty future yet. It took a bounce yesterday in second half but width of the triangle may go narrow. On other hand it is not breaking higher or lower than the width. If I have to opt trading then I may opt shorting on rise. Technical resistance can emerge at 8700 and then at 8750.

BANK NIFTY – This index is working as cushion for blue chip index. It is saving fall as well as it is limited rise. 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.