Sunday, December 18, 2016

Eventually lower level await the Markets

December is turning out to be a listless period for the markets. We are stuck in a trading zone which seems to be getting narrower by the day.

1. 7500-7700 levels seem to be a matter of time. 1 probable wave count is

A 7916-8251
B 8251-8056
C 8056 - 8274

Now the fall from 8274 is very slow, so it could be

A 7916-8251
B a 8251-8056
B b 8056-8074
B c 8274 should end above 8043

This is said to be irregular correction.

C wave can go up till 8337- 8400 and then a final down move of 7500-7700.

Or we can go straight from here to 7500 7700. Either ways we seem to be headed down now or in the New Year.

The strategy remains the same accumulate on declines. The Bollinger Bands are narrowing with range between 8269 and 8069
There are no more triggers left for the markets for this year.

Sunday, December 4, 2016

The Down move resumes

The markets almost tested the 50 pc retracement of the fall from the top made after Trump election and then the down move seems to have continued.

1. A dip below 8000 will confirm that the downtrend has resumed.

2. A key feature of this down trend has been the non stop selling by the FIIs. The DIIs have stepped n and bought a large quantity else we would have been at 7500.

3. The first half of December will have the RBI policy meet coming up, the US Fed meet and all the action is expected in the first 15 days. I expect the first 15-20 days to be negative and then the markets will pick up.

4. Elliot wise a last leg of fall of 700 to 1000 points is pending. I expect 7500-7600 to hold.

5. The RBI will have to go in for a 25 basis points cut. They are now behind the yield curve that is the rates have fallen below the rates.

6. The auto sector seems to be resilient and  the sales of 4 wheelers have not dropped dramatically as expected.

Every dip is a buying opportunity and one should take advantage of this fall.