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Nifty Analysis, June 06, 2015


As predicted successfully last week in our previous analysis, Nifty had a humpty dumpty  fall and fell over 3% last week. Nifty was facing heavy resistance at 8500 levels with option data suggesting a positive bias. Monetary policy on Tuesday, June 02, 2015, provided adequate reasons for stakeholders to exit their long positions which were made the week before. Apparently the institutional investors haven't made short positions in stocks by now but the current options data suggest the shorting is on the way. It is still not the correct time to enter the markets with a long bias. However those who are looking for investments can keep accumulating but again, don't go all in. It is quite expected from Nifty to touch 7800 levels before entering into any significant dominant trend to the upside.


 Technical Analysis
Weekly Chart:
Nifty on weekly chart completed its 5th sub wave of 3rd major wave in uptrend in first week of March. Going further it started its correctional wave (assumed to be 4th wave of the uptrend in consideration). It is also expected that it shall form a complex wave pattern. Probability is a 3.3.5 correction. The first A wave (5) is in progress. Nifty this week closed at 8114 levels which has broken the previously acclaimed 8210 level to the downside thereby confirming the 5th minor wave of a bigger corrective A wave. The next major support for Nifty is seen at 7800 levels where the 2nd wave of the previous dominant trend ended. The option data also suggests the same. Nifty's 7700 and 7800 Put options has risen by more than 300% post Tuesday fall. Currently the Nifty has closed just above the 8100. It shall continue the down move further until the 7800 levels are reached.  MACD remains open wide to the downside. There seems no support above 7800 what so ever, hence it is evident that such lower levels should be reached in couple of weeks' time.

Daily Chart:
5th sub wave of 3 wave in major uptrend ended on 19.02.15. Then started a complex correction which is expected to have completed "A wave" and is a 3.3.5 pattern. It is assumed that current wave for Nifty daily is a correctional "B wave" and may further carry on to make 3.3.5 pattern. Nifty breached 8317 level to the downside and the complex structure of entire 4th wave in major trend is   confirmed. It has made a low of 8114 on closing basis. MACD is poised at an extremely negative zone. A continuation in fall is imminent in next few days. It is expected Nifty shall experience heavy resistance at 5-10 Mas. The bollinger bands is suggesting an increase in volatility. Nifty has been hovering around its 200 EMA on daily charts. The current corrective trend which has been initiated in the earlier half of this week shall take Nifty below the previous low of 8062. 

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