Nifty Update

Nifty Daily.

Bank Nifty Weekly.

Nifty, Bank Nifty and Elliott Waves.

We mentioned in our previous post that Nifty holds a very strong support around 5600 and the Indian benchmark index has the potential to bounce back from there. Nifty moved as anticipated and did not broke the shackles, instead took support from their and gave a rapid rally. We saw an intra-day low of 5556 but the total consensus of the market remained bullish, with bulls wiping out the bearish efforts. But what should have been the next move?

Here's a summary of our research report as published on 26th June 2013:-

Nifty and Bank nifty are forming a __________ relationship with each other. With Elliott waves highly impacting both the indices we would certainly prefer to take trades as per Elliott levels.

A close look at Nifty tells us that currently ____wave is in progress on daily charts while on the weekly charts the last advance till 6240 and the fall there after shows that ______ wave seems to take formation. Considering these two set ups we recommend to take a buy position till 5900 as our first target and then T2 till _____. Once Nifty takes a leg up and breaches T2, then we can see the benchmark index trading at _____. But only if T2 is broken, as both 5900 and T2 are quite strong Elliott levels and Nifty can potentially resume it's downtrend from there.

Now considering the weekly charts of Bank Nifty, we are currently witnessing the ______ formation of Elliott waves. This means that we can see a max.  ___% retracement of the the previous fall and Bank Nifty can rise within the range of _____ to _____.

Coming back to the _______ relationship forming between Nifty and Bank Nifty, the later might not move as quickly as former. And, if Nifty resumes it's downtrend after reaching it's first target i.e. 5900 or T2, we recommend to square off the buying position in Bank nifty as well. Because then we will not see Bank Nifty moving up to it's maximum level.

Since, Nifty and Bank Nifty are currently respecting the theory of Elliott waves so well, it seems very likely that Elliott levels thus derived shall be highly respected in the future and we will witness our targets again being met. But this up move will be quite sharp and no one knows from where exactly will market resume it's downtrend. It could be any of the above mentioned levels. Hence, we recommend to do partial profit booking at each level and trail your SL's ( the levels of SL shall be updated on time.)

As of the changes in the charts till date, Nifty will remain positive till 5800 is intact and our T2 and other targets are likely to be achieved. Once this is broken, we can witness our benchmark index trading at 5700-5750 where it can take support.

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