14 October 2016: Nifty Elliott wave analysis: 8500 support is a key for now. Do not short from lower levels unless it breaks 8500.

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

For 14 October 2016: -

On 13 October 2016: FII Net Sold – INR 911.53 Crs:  DII Net Bought – INR – 679.49 Crs

Well, my target has done as of now. Worse part is that it came with a big gap down. This is most unfavourable kind of trading session. What is next for technical now? I must say that 8500 is a meaningful short term support for Nifty. Now, from near to 8500, traders should not add short from lower levels. I am still expecting extension of fall but with some bounce.

A chance for bounce is bright today but this is not a technical call. It is most common psychology of market that good days used to come immediate after bad day.

I have already forecasted for a fall once market goes in full trade mode and that will start from today. ELLIOTT wave based target may be in the range of 8200-8000 levels. This will be applicable sooner. I am keeping this part for some time for my analysis.

For today’s trading session I am expecting market to open with flat note or may be little positive. Then, market may like to retrace up to 8620-8650 levels. Chances are there for higher levels but that’s backed by only due to yesterday’s gap down. It should be an attempt for gap fill but that’s not possible to fill. Hence, my expectation is a recovery in first half and then fall in second half. Technical signal for trade has yet to be generated.

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 October future – I am optimistic for recovery but this is not a call yet. This this fails then we can see further cut of 70-80 points from current levels. On higher side 8620-8650 is a zone of resistance. Let us see if recovery comes or fall continues.

BANK NIFTY – Bank Nifty came very near to 18800 and this may be too much for a day. I am not advising fresh short form lower levels without any bounce. Day may be unfavourable for recovery in second half.  We do not have any clear sign of taking a call on recovery but this is my expectation. Let us see if this works.