A tremendous fall and an awesome Hill climb, the first quarter of the FY-20 has been full of thrill for traders and confusing for investors looking to average or buy back. First of all the fall wasn’t a crash, it was purely pattern driven with an ultimate target of roughly 7200-100. Predicted Chart has been attached below.
The SGX Nifty made a low of 7155. And the rest event in spot market is recorded in everyone’s charts. Now that market has just kissed the retracement level of 0.618 at roughly 10550 levels from its low a Bearish Wolfe Wave has formed. -The Bearish Wolfe Wave in Daily chart has been confirmed with a Bearish Engulfing pattern. -The Bearish Engulfing pattern has been formed at official level of 0.618. So this has to be taken seriously, or staying cautious at minimum by squaring of the over exposed positions. In this Chart what is been tried to convey is as follows: - The blue lines may act as support in this downward journey - The target line is mentioned with highlighted text in the chart. Which comes out to be 10100 or 9380 – 9360 Levels approximately by 30th June to 7th July after 1:15pm. - What the scenario of the support would be clearer near the dates. And if this downside correction occurs it is completely justified. During an upside rally it is quite common to come back to a downside retracement level for an upside bounce. Who knows it may form a Bullish Wolfe Wave during the downside journey. Here the retracement level of 0.618 is 10550 and 0.382 is 9389 with respect to the trend of 20th Jan to 24th March.
The prediction done earlier for 10550 levels has been attached along with this chart below.
Happy Investing. THIS IS FOR EDUCATIONAL PURPOSE ONLY
Is structure still valid after breaking 10551... is it right time to go short?
AdarshDey
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@djmunjal, Yes it is still valid. But it would test your patience as the it has entered into a lagging timezone.
Regarding short, In stocks it is a good time to book 25% to 40% of the portfolio. But to short nifty you need to wait for 10750 or 10514 with a bearish confirmation
djmunjal
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@FinancelY, today we saw 10750, but nifty has broken wedge on upside...i think now should wait for 10514
AdarshDey
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@djmunjal, Thats true and a gap up could be seen above the black line to make itself free from any resistance. Again when it comes below the black line selling pressure could be seen.
Retail Investors alone cannot drive the market too far. However trend would be more clear after 9th July.
Only God or a liar could tell you about the exact bottom or high. So please stay cautious, Happy Investing
djmunjal
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@FinancelY, whats your views now?
samratk028
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Hi, When would be the right time to invest for long term? I am planning to invest now, should I wait for correction?
AdarshDey
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@samratk028, Hi, As you mentioned for long term investment so 10% of the amount could be invested soon in Nifty Bees. After 3-4 Years this investment would seem really wise.
And if you want to invest in stocks then i suggest to wait for a while, Keeping aside 3/4 of the total amount in the bank account , and the remaining 1/4 to be invested at any sharp dips (ITC,HUL,LT, JSW STL)
samratk028
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@FinancelY, Thanks for the prompt reply
AdarshDey
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Any Inquiry or Views & Suggestion are always Welcome.
Thanks