27 September 2016: Nifty Elliott wave analysis: Do not short from low before expiry. I may be off the trade near to expiry.

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

For 27 September 2016: -

On 26 September 2016: FII Net Sold – INR 206.40 Crs:  DII Net Sold – INR – 113.35 Crs

Yesterday’s low turned to be 8715 and this turns out to be very close to the decisive support of 8680. Will it hit or miss before expiry? I usually do not prefer to trade expiry days or nearby and hence I may opt to stay away from trading. I can participate only if I can get concrete signal. Well, this is my comfort zone to pick a trade.

For today’s trading session I do not have great clue where will this market open. I have few short positions which I will prefer to unwind. Technical support may emerge at 8680 levels and this may turn to be decisive. A recovery may hit if this support works. Traders must go on caution due to derivative expiry. Near to the support of 8680 and derivative expiry, I do not suggest much to trade.

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 – SGX Nifty is giving a hint for flat start. I am short from yesterday and I will close my short now. I prefer to make a switch to October month trade but I will prefer to go on wait and watch mode for some time.  One should check my twitter handler to see intraday updates. Revised levels will be updated.

BANK NIFTY – I am already off to my trade of short on this index as expiry is very close. I am just making my position lighter.   We may expect BANK NIFTY to crash near to 19500 but this is largely an expectation. It may take some more time to come. One must avoid shorting from lower levels. If one has not shorted on rise then there is no point to short at 19700 for just 150-200 points. Risk – reward ratio may not be favourable.