15 September 2016: Nifty Elliott wave analysis: Sit side-line if market remains choppy. Do not be compulsive short seller.

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

For 15 September 2016: -

On 14 September 2016: FII Net Sold – INR 477.33 Crs:  DII Net Sold – INR – 8.53 Crs

After a massive gap down, market has traded flat for two trading sessions and refusing any recovery. Well, this cannot be sign of recovery although basics of technical analysis suggests for at least partial recovery to fill gap. So far, there is no such sign and hence I am sitting on side line for index activity. My view is that Nifty is bounce to hit 8600 sooner or later. May be this week or may be next week. It does not matter if it comes with a bounce or come with no bounce.

For today’s trading session I am not expecting anything great to happen on index. We can expect technical support in the zone of 8700 to 8675 levels. On higher side 8780-8800 levels is a zone of resistance. If market remains in range then just avoid Nifty for trading. We may get many stock specific reading activities. One must be note that this market is not good for long term buying as I am getting a hint that rise has done for now. It is long term corrective wave B which ended near 8950. So, a dip can be painful.

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 – Well, if you think by reading above that I will be a compulsive long then please hold on. Above was long term view for a consequence of wave B. For trading, we may have trading support at lower levels. Hence, I am not short for fresh from past two days. I shorted at 8930 and booked at 8760. Now, wait and watch for next trading opportunity. Short? Long? Short? Long? Short? Long? Short? Long?       

BANK NIFTY – As long as it is below 20000 to 20100, we can expect levels of 19500 but this is just a raw analysis. We need to refine with timing as timing in more important. I must say that 19500 will not come in one go or easily. So far, my view is that one can use higher end to short depending on market momentum as higher levels are assumed to be for shorting.