25 May 2018: Nifty Elliott wave analysis: Litmus test for bounce will come today. Cautiously optimistic.

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

Analysis 25 May 2018: -

On 23 May 2018: FII Net Sold – 311.11 INR Crs:  DII Net Bought – INR – 789.78 Crs

We got the expected bounce. It was technical in nature which intraday traders must have enjoyed. Real test of bounce will come today. The biggest challenge on the chart is at 10560 levels on Nifty, a previous support will become resistance.

Now, it is the time to be concerned on Oil price. I rarely watch TV but I watched last night. I heard someone connecting higher oil price with development, so called Vikash. It is damn stupid logic. If a thing goes like this then economy has to pay a lot. So far, stock market has not reacted at all with higher energy oil price. At some point, Stock market will react.

If I connect the current pace of rise on oil price and compare with all time high then if it touches all time high again then we have to pay Rs 200-250 per Litre for Petrol.

For today’s trading session, I go with caution and I am expecting the extension of the rise which started yesterday. Technical support will be at 10480-10460. As long as it is above 10460, there is no point of shorting. On higher side we can expect first meaningful resistance at 10560. The next move will depend on the nature of market at 10560.

Avoid any kind of investment as market is still looking expensive.

Strategy for Nifty May future – Nifty future to about to open at 10515 levels. This is sufficient high to expect strength. It may take a dip before rise and then traders should prefer to trade long in dip with stop loss somewhere near to 10460. If it breaks 10460, then market to go on reverse mode again. Remember that market has yet to react with higher oil price sooner.

BANK NIFTY May future – Bank Nifty bounce sharper than expected and it came to 26000 levels. For today’s session we can expect technical support at 25800 levels. On higher side we can wait to see for 26100 levels. I am not very convinced for great extension of recovery hence I am going to trade limited and I will this index for long.