With the deadly second wave of Covid-19 and more and more states locking down the big cities, it is difficult to digest that the market is going to make new All-time highs and it would make more sense for the market to crash given the situation we are in. Having said that, we are indeed starting a new multi-month rally. Those who want to know the how and why about this rally must know about the new G-SAP 1.0 policy announced by RBI in their last meeting, it is basically a bond-buying commitment of the RBI. RBI announced that it will purchase G-Secs totaling Rs 1 lakh crore over FY2021-22. The word ‘unconditional’ here connotes that RBI has committed up front that it will buy G-Secs irrespective of the market sentiment. Sounds like QE to me. This keeps real interest rates negative and stimulates the economy. The flip side of it is that those saving in fixed income securities will eventually won't earn enough to beat inflation and will have move to equities.
Coming to the Elliot waves, the (3)wave that started in May isn't over yet. After almost a two-month long wave 4 of (3) consolidation, Nifty has broken out of the falling trendline in wave 5 of (3). This should be a multi-month wave like 1 and 3 of (3) have been with minor corrections in between. In the Nifty 50 hourly charts here, wave 1 of 5 of (3) is going on right now and with (iv) of 1 going on right now (v) will start soon and can takes us 15150-15250. Channel drawn from may'20 top to feb'20 top extends to above 17000 and I expect Nifty to be there by June.
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May 3rd- So far, early in the day the Nifty has fallen in 3 waves. Now unless it transforms into an impulse we cannot say that we have a bear market trend in progress. The odds remain that an A-B-C correction retraced 78.6% of the rise and found support at the gap zone near 14421. Take it or leave it, do state elections matter beyond a one-day reaction? Study history. Covid is new and we are fighting between its impact v/s the impact of liquidity on financial markets.
you think covid situation is not hampering or it was a bear trap? Aaj ki closing will give you ans, yesterday tak ki rally was whole month short-covering thats all. this is market law agar start k 3 hafte market only wanted to go down then last week me recovery and agar shuruat k 3 hafte market gave up more then last k hafte me guarantee some down move
Quasim
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@Kakerot, I don't think there are any traps, people enter late in a move because of the fear of missing out and start calling it a trap, I have made that mistake too. What me or you or pados wala santosh thinks about covid situation is of less importance than what these investment banks and mutual fund managers think matters, what also matters is how much liquid cash they have and their cost of capital. You can check FTSE during UK's second wave, S&P 500 during US second wave or Bovespa during Brazil's 2nd wave. I find 0 correlation between covid cases and Nifty, March 2020 crash is attibuted to covid but Nifty mid-smallcap had been in a bear market since 2018, and 2020 was just the final leg of correction.
The three theory you're saying is actually what is called scenario analysis, on Niftu 50, i see 2 weeks to work better than 3 weeks but there are no guarantees in the market. I can show 4-5 weeks of bullish rally in Nifty. Apart from this, instead of trying to catch 1 week reversal, i like catching 3 week rally in the direction of a larger trend.
I won't be bearish till the time prices stay above 20-day average for Nifty 50 and Bank Nifty on closing basis.
Kakerot
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@Quasim, i stand corrected my friend it was a big big trap especially in nifty heavyweights, go check chart of today of infosys hcl tech TCS and even hdfc twins the real heavy weights, all tech stocks saw gradual decling like someone was offloading, only metal was tall as expected. it is bull trap on bigger level 13600-800 k darsan honge before any kind of upmove towards 16000 aaj FII sold 3500 crore worth in cash and DII only bough 1300 crore as well index fut high 600 crore worth short and index and stock specific Put options buying seen. If im wrong and nifty dont fall below 14k i still dont see nifty touching 15k in near term, these big selling number dont lie only the biggies the FII can move the market they sold in cash and bough puts, if DII me dum he to le jae 15k k uper jo inme nahi he
Kakerot
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it is funny that my analysis at the start of day was so crystal that i said " Aaj ki closing will give you ans " @Quasim, iv seen these rally in a bad market to brinks of unattainable high like 15k which happened yesterday i not only shorted call of 15k of may month at price of nearly 400 i also took put position yesterday in 15k put which gave multifold return yesterday selling was very easy to anticipate aaj ki anticipation was only due to having the power of BAD CORONA SENTIMENT at your side FII selling data is proof of that
Quasim
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@Kakerot, One candle is not a trend. We'll discuss at the break of either 14160 or 15044. At a lower low or higher high formation.
As said before, till the time the 20-day moving average holds closing basis, I am staying bullish. If you'll read my initial counts again I said (iv) is going on and if you know elliot waves, 2nd and 4th are corrective waves and although it fell more than I expected, the fall today was expected. I am planning to publish an educational video on Elliot waves, maybe next week do check at that time.
If you're bearish, You can stay bearish I neither can nor do I want to shove my view down your throat. If I am wrong my stop loss will get hit, if you're wrong your stop loss will be taken, let the market decide who is right or wrong.
Quasim
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@Kakerot Do you notice a persistence higher high, higher low formation. the sentiments from covid that I underestimated didn't let it rally like I was expecting but it didn't fall either.