Nifty Short term view based on the Harmonic study.
The Index is currently near 9550 Spot level and is showing too much strength. Macroeconomic factors look to be in favor of Indian markets with the prediction of good monsoons and inception of GST. GST will be a game-changer. Lower crude oil prices have already shown us what it can do for developing countries like India. All good, however, how we know that those factors have been factored in or not. Harmonic patterns show us the way.
Nifty short term view based on Bullish AB = CD, weekly charts.
To Complete the pattern (i.e. For Perfect AB =CD)
Nifty must make a High around 10,000+
It is evident from recent moves of Nifty that some Steam is Left also as per Technical Indicators and Oscillators.
The Index has been hovering around and above 20+ PE ratio from the last few months and every fall has been used by Market movers to long Nifty.
Though Several Hurdle is there.
These are some Technical Resistance levels, which can pose a threat to up-move:
9624, 9690, 9774,9870, 9950 .
Bearish Wolfe Wave in Progress on Nifty weekly charts. (Possibility, see chart 2)
It is premature to say that Bearish Wolfe Wave will form right now, However, it is a possibility because of following reasons:
- Nifty is overbought and needs to correct.
- Perfect AB=CD legs have a good success rate for Wolfe waves.
Advice: These levels are not comfortable to create fresh positional longs. I recommend partial booking from midcaps and small caps (because they are the ones to lead the fall) & do sips’ in A grade stocks. I will let you know which Shares to buy in my next post.
You can also read the article where I have mentioned two good investments A-grade stocks.
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