Morning !
Re-iterating the fact that NIFTY and BANKNIFTY, both had hit the stop loss given by me in my previous post, but on the other hand i have not been on the buying side too. One of the major election results were out which acted as a game changer in one of the biggest states of India on 11th March 2017, something that the markets had already factored in when it triggered some upside levels like 8950 in early March by making a high of 8992.50.
Markets are always ahead in the race when it comes to social mood and investor psychology.
Since the stop loss i give are usually 1:5 or 1:10 ratio when it comes to target: stop loss points, i have always ensured optimum trading strategies but with a fair call out by mentioning a stop loss which if triggers puts you out of the market and further stops you to jeopardize your trades.
Only after achieving one result either stop loss or target i give further view and hence have been waiting for this event which acted as a catalyst to complete the pattern we all have been waiting for since the time it made a low of 6825 in February 2016. In this fall also, the low made was 7893 and it somehow managed to stay above 7777 which was the stop loss for any buying made as mentioned in my previous post:
Excerpt from above post: "Since the wave one was 6825 to 7777.....top of wave 1 ended at 7777 the fall from 8968 cannot take out this zone as per the wave principle.....non over lapping rule. Wave 4 cannot take out the top of wave 1."
Coming back to this post, the wave counts were as mentioned in the earlier post:
Excerpt from above post:
"WAVE 1 : 6825-7777
WAVE 2: 7777-7516WAVE 3: 7516-8850 to 9000 zone Actual end at 8968WAVE 4: 8850 to 9000 Actual top 8968 till 8650-8450 zone potential (Actual 7893) WAVE 5: 8650-8450 (Actual 7893) to 9119+ levels like 9150-9350-9550 (Estimated top will have to wait for the wave structure)"
Since the Wave 1 top 7777 was not taken out by Wave 4 on downside i.e., 8968-7893 and it again went up above Wave 3 high of 8968 by making 8992, the case again opens for a new high above 9119 which SGX Nifty has already shown up in Global Indices segment by ensuring Approximately 220 + points so a rough calculation of spot price as on Friday i.e., 8934 + 220 takes it upto 9154 taking out 9119 and making all time new high, but this potential gap up should fizzle out soon in a week or two weeks time frame again in the zone of 9150-9250-9350 and finish this rally which started from 6825 and subsequently a bigger wave which started from 2252 way back on 27th October 2008.
Yes, this wave structure not only concludes the rally momentarily which began from 6825 since February 2016 but it also finishes up a bigger degree wave structure too which started in October 2008.
Fifth Wave of the pattern started from 6825 and also the fifth wave of the pattern started from 2252.
The top is about to be completed in this week's time and post that reversal should happen across many sectors and stocks. Hence the logic of squaring off all the trades on buying side was suggested in early January 2017.
For BANKNIFTY, it has already made a new all time high as compared to its Mixed Index Nifty on 17th February of 21042.35.
On the other hand BANKNIFTY is also about to complete fifth wave of the pattern which was started on 29th February 2016 at 13407.25 and subsequently the fifth wave of bigger degree of the pattern which was started on 20th December 2011 from 7766.35.
Excerpt from post: "I have been of a NO trade view at least not for buying since 4th January 2017 and hence have only been stock specific.Post made on 22nd November 2016 on POSITIONAL BUY CALL GIVEN ON MARUTI at level of 4830 with a mini SL of 4767 (63 points) and targets till 6100. This was achieved in last week and has already overpassed the final target of 6100. Though i had given exit from all buying on 4th January when it was trading at 5500s, my endeavour was to make people come out before this ends up at the top and now since the targets are achieved in MARUTI, it is time to sell it again tomorrow or above 6300 with a mini SL of 6350 again and a POSITIONAL target of 4790-3200 range. The wave structure of MARUTI is about to complete and is in its almost last leg."
Looks like the 5800 made on 8th March is the beginning of the last rise for targets of 6233 + levels like 6250-6350-6450 max uptill 6500. Not giving any trade call on this one, let it finish the upside above 6233 only then will give the potential level to sell with a mini SL for the same downside target of 4790-3200 range of the positional target call.
IT and PHARMA sectors have been looking bad since last one quarter and i have been giving signals of continued weakness. Stay in cash in these stocks: INFY, WIPRO, TECHM,TCS in IT and DRREDDY, AUROPHARMA, SUNPHARMA, WOCKPHARMA etc.
Let us wait for the potential top of 9119+ level in the coming sessions and wait for a reversal of a bigger degree.
Happy Trading !
