8 May 2017


Hi Friends,

Nifty has been in range of 9270-9370 for last 6-7 trading sessions. Nifty formed an Engulfing Bearish Candle with Negative RSI Divergence on Daily Chart after testing 9377. On next day Nifty formed Inside Day and gave a Doji close.  All these are signs of Distribution and Market might be in Process of forming Medium Term Top.

As mentioned Nifty seems to be in 1st Wave of the Bull Market which started near 7900. Nifty seem to have completed 5 Wave Rise near 9377 with an extended 3rd Wave. The Divergence between 3rd and 5th Wave is initial signal of Trend Reversal. Nifty is facing strong Resistance near 9370 and Support at 9270. Nifty spent more than a week within this range which is more likely to be a sign of Distribution as visible from the Chart below. Nifty formed an Ending Diagonal in wave (v) of Wave 5. And dropped sharply to 9270 which might be wave (i) of the impending Correction. Pullback in wave (ii) seems to be a Bull Trap.

Currently there is Strong Support at 9270-9230. Resistance is at 9340-9370. Once Nifty breaks the Support it may decline to 9025. Downtrend will be confirmed below 9230. Below 9025 Nifty may further decline to 8905-8810-8710. The extent of Correction in Wave 2 will be known as the Market unfolds going forward. 

As mentioned in my video analysis the crowd is now extremely Bullish as Nifty reaching All Time Highs. It's a Typical phenomenon of Market Sentiments. Currently Bulls need to be extremely careful. One must book profits and remain in cash. And must avoid excessive Buying or leveraging. Trend will change to Down below 9230. Once the Trend changes to Down one can then short on Rise.

As mentioned we are still in early stage of Bull Market. Those who haven't made any Investments can wait for the Correction to get over in a month ahead. The Correction will give a Buying Opportunity. One needs to find Stock Specific Opportunities to make Investment in Equities. Currently just wait for Correction to get over.

Thanks & Regards,

Harsh Dixit.