21 October 2016: Nifty Elliott wave analysis: 8700-8740 is zone of stiff resistance. We may see a possible sell signal generating in this zone.

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

For 21 October 2016: -

On 20 October 2016: FII Net Bought – INR 7.30 Crs:  DII Net Bought – INR – 583.22 Crs

This is halt on 8700 levels and we have a meaningful resistance at 8740 levels. Technical charts are just suggesting that we are on resistance levels. I cannot see any big sign of weakness or even a sign of weakness to trade short. In short I do not think that market is on tradable mode. Today is Friday and market may respond on its call on 8700. Will it make or will it break?

Equally, market may betray bulls at higher levels sooner. We are heading towards resistance zone. I am not very sure that we should take a risk of trading long although shorting also may not work. In alter sense we can say that we can get a buy if Nifty can stand above 8700. It is true but we can see multiple resistances above 8700. One such is 8720-8740.

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 as indicated by SGX nifty. Technical charts are saying to avoid trade if one has no great guts to flow against market. I am not very keen in trading long at 8700. If I can see the sign of weakness or profit taking the only I will opt trading short. Let us see if we can trade or not. I am not touching index future from past two trading days.

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 not very sure if traders can get safer trade by going long at 8700 levels. If Nifty opens near or above 8700 this will be a avoid zone for me. Technical support is at 8640-8630 levels. On higher side it should have resistance at 8700 where it is about to open. Logically, it can hit 8740 if it can sustain above 8700. Will it break at top? A billion dollar question.

BANK NIFTY – Well, it was just BANKNIFTY which has saved NIFTY. I am concluding that BANK NIFTY has resistance at 19700 which has worked as support when it was at higher levels. If this fails at 19700 then we can able to see a fall up to 19500 first. Big question is that can we able to see a possible sell signal at 19700? If we can get then only we can able to see possible fall. So far, no great sign to trade.