A normal correction (without impact of COVID-19), would have taken NIFTY to level of 9700-10300 (~22% - 20%) based on past drop analysis (Fibonacci Retracements and GANN BOX). Considering impact of COVID-19, a further drop of 22-25% occurred based on impact of economy (basically FY2020-21 Q1 has impacted, so around 25% net impact), hence OVERALL drop of around 45-47% from market peak, which is 7500 for NIFTY.
So, I think NIFTY has already left it BOTTOM or at best it can RETEST it BUT NOT drop further, if COVID-19 situation start improving from MAY-2020 and LOCKDOWN lifted before 01-May-2020.
Thanks
Comment
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I need to a bit more elaborate graphs here.
Case-1: ONLY Market correction: Suppose there has been not been issue of COVID-19 and market took a correction....how much correction expected in this case? As per my analysis, correction could be in range of 18-20% as per previous correction, which is also validate by 200 SMA as updated in post.
Case-2: Market Correction + Economic Impact due to COVID-19: In this case, apart from market correction of 20%, additional economic impact of 25% added, which makes net impact of ~40%, this what has Market has achieved from its high position.
Hope this clarifies.
Note-1: Additional impact due to economy may increase further if lockdown goes beyond 01-MAY-20, so lockdown till 01-May-20 is already considered.
Note-2: Fib Ret plotted in reverse order to get upper limit if Wave-5 goes on.
Note-3: In learning phase, so comments/ suggestions are invited for self improvement & learning.
Purely on technical grounds an excellent analysis! Concise, logical and perfectly plausible. If I can add my two bits worth - Dow Jones has a major impact on global indices and has triggered this correction. 35% correction has occurred in DJI which is classified as bear market. The recovery has reduced the losses to less than 20%, the minimal level to be classified as bear market. However, here the narrative changes. With more than half a million infections. staggering number of deaths and subsequent job losses, with China emerging stronger from the pandemic, DJI will get further hit. Will Nifty not get impacted? The time wise correction will be more depressing as poor get hit with further lockdown. So far India has been lucky as far as pandemic is concerned. Should there be a spike in number of cases resulting in community spread, the economic impact will be much worse. Such a big correction will have a second leg down and the effect can be for as long as a year or more.
Regarding impact due to DJI, I think its valid point and will study on it.
On further impact of COVID, I think at this moment we can just roughly estimate on future. If situation worsen, then bottom of market can be any thing, immediate support will be 6300 (if it get control by Jul-Aug) or even 4500 (if it control by Oct-Nov).....and this may keep going on.
But as of now as no community spread started, I think, situation should be under control and lockdown may be relax by May beginning, hence 7500 make sense.
Thanks
kamathnandan
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@SatyendraChoudhery, if u go by Elliot wave theory market will bottom at 5100 or 6300... ☺️ 12300 7500 9900 6300 or 5100
ashoksamuel02
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Fib plotted wrongly
SatyendraChoudhery
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@ashoksamuel02, Actually to get further uptrend, I just reversed it (as provided in applying option). Hope it clarifies. I personally not big fan of Fib, so please highlight any issues in interpretation.
ashoksamuel02
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Previous ones are correction but now its a crash
SatyendraChoudhery
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@ashoksamuel02, So I need to a bit more elaborate graphs here.
Case-1: ONLY Market correction:
Suppose there has been not been issue of COVID-19 and market took a correction....how much correction expected in this case? As per my analysis, correction could be in range of 18-20% as per previous correction, which is also validate by 200 SMA as updated in post.
Case-2: Market Correction + Economic Impact due to COVID-19:
In this case, apart from market correction of 20%, additional economic impact of 25% added, which makes net impact of ~40%, this what has Market has achieved from its high position.
Hope this clarifies.
Note: Additional impact due to economy may increase further if lockdown goes beyond 01-MAY-20, so lockdown till 01-May-20 is already considered.
sivakumar.mutnuri
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How the fall from 12430 to 7511 is 45% correction...plz check once
SatyendraChoudhery
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@sivakumar.mutnuri, Thanks. this has been corrected:
Apart from market correction of 20%, additional economic impact of 25% added, which makes net impact of ~40%