19 October 2016: Nifty Elliott wave analysis: Bounce to extend which has started from 8500 !!!

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

For 19 October 2016: -

On 18 October 2016: FII Net Bought – INR 345.04 Crs:  DII Net Bought – INR – 173.36 Crs

I have predicted for bounce from levels near to 8500. We exactly got that. Well, magnitude of this rise was beyond my expectation. I was not expecting much beyond 8620 but it has moved well 60 points advance and that’s too after a firm gap up. I traded long in last hour only to manage some gain on index.

As recovery on Nifty is already coming near 8700 so I cannot suggest jumping on buy. Wait for pullback to add long. Just do not opt shorting as long as it is above 8620. This recovery may have more steam and it can hit 8700 or may be even at 8750 levels.

I have already said that next leg of fall will be decided by the magnitude of recovery. It is a big question for the possible top. Let us see if it comes at 8700 or 8750 or at 8800.

For today’s trading session I am expecting market to open on flat note. I am not in the mood to trade short after seeing yesterday’s momentum. Technically, we can buy in a pullback. Just a view, if I can get this at 8650-8630 levels then I can get long.  

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 – Of this 100 points intraday rise, I was able to capitalize long from 8660 to 8680 only. I missed most part on anticipation. Technically, we can see a pullback today which should be intraday in nature. My prefer range for one long attempt will be at 8650-8630. This is just my anticipation of winning at resistance. As it is not a complete technical view so I need more confirmation.

BANK NIFTY – I definitely had a plan to add short at 19400 but I dropped that idea after seeing the great momentum. This is the use of real time analysis. I believe that market can head forward more and more in coming few days. I am carried away with momentum only and hence I am seeing possibility of further rise after an intraday correction. Technically, we are on resistance but momentum can overcome resistance. Hence, buy in dip. I cannot spot out a concrete level.