21 September 2016: Nifty Elliott wave analysis: It can take some more time before a big dip. Trend reversal support on Nifty is at 8685.

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

For 21 September 2016: -

On 20 September 2016: FII Net Sold – INR 1146.93 Crs:  DII Net Bought – INR – 777.52 Crs

This down turn has got some silence but it has higher chance to head lower in coming days. Price charts are suggesting that a strong sell signal will emerge below 8685 and resistance is expected at 8855 levels. This range of 165 points may not give much opportunity to trade for direction although there may be many possible swings. Once it breaks 8685 then we may expect some unexpected levels. We are almost 90 points away form a decisive and trend reversal support.

For today’s trading session I am expecting market to open on soft note. I am quoting two important supports; one is at 8740 and next to come at 8685. Can we see the break of second? If yes then we can see a painful dip for which many traders may not be prepared. Well, at least do not trade long as of now on indices. If one wants to buy then one can opt stocks to trade long where one may get many options.

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 can still repeat that technical set up is favouring sell mode but we cannot say when will hit in big way. Before slipping in a big way it may turn range bound to choppy and may be one more bounce to wash out weak bears. I am considering this rise as an attempt by market to washout weak bears. Wait for a firm sell signal which will come below 8770.

BANK NIFTY – It is just here and there near 19850. If we can see break below 19750 on decisive way then we can see a possibility of 19500. Market may be optimistic about rate cut next months but those things may not be that easy. One must avoid any kind of positional long although we may get some intraday swings out of which many should be on short side.