17 October 2016: Nifty Elliott wave analysis: Will it break 8500? This may be more speculative and less technical deal.

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

For 17 October 2016: -

On 14 October 2016: FII Net Sold – INR 946.42 Crs:  DII Net Bought – INR – 556.90 Crs

I was expecting dead sessions after gap down opening and we exactly got the same. I can issue a warning that traders should restrict their activity for today too as market may be in the range again. I do not think that Nifty can breaks 8500 so easily so sooner. My expectation is that it will break but I cannot say how many trading sessions will it take. We may see the break today itself or we may have to wait till the last of this week. No analysis can give us time.

Level wise my analysis remains same but momentum may go in favour of bears. Longer it takes lesser will be possibility for bounce.

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. Then, market may react to a dull session. Do not act immediately. I am expecting down but more than that I am expecting choppy down. There is a lack of confirmation for trading. One has to trade on speculative signal which I prefer to avoid. It may be 50-50 deal.

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 – My study remains same. 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.