R.I.P all the hopes of efficient market punters who were betting on the index for scaling higher, re-test their previous highs, breach the psychological resistance of12,000 and an unstoppable journey to 13,000 levels after the majority won government-led-Narendra Modi and appointment of India’s firast female Finance Minister Nirmala Sitharaman will present Union Budget 2019-20 and come up with a lot of rescues for deteriorating sectors but the last laugh by her to push the minimum public shareholding from 25% to 35% activated the bears as it will deteriorate the upcoming demand and supply mechanism of various high market-cap underlying assets and there will be more ins and outs of the companies in Nifty-50 index.
So tighten up your seat belts as market is entering in the arena of 11,400 levels in order to complete the Corrective (C) wave as per Elliot Wave Theory. On daily scale, the 50-stock bundle is complying all the criterions required to fulfill the Elliot Waves theory as 1,3 and 5 impulsive waves were formed at 11,118, 11,856.15 and 12,103.05 levels respectively along with their minor corrective ( retracements) at 10,585.65 and 11,108.30 levels respectively.
While three small degree waves that are denoted as ABC are placed at 11,625.10, 11,981.75 and third is expected to form at 11,400 levels that is going to be a major support for the index calculated after employing 1.618% Fibonacci Extension tool. RSI has witnessed a sharp dip showing no signs of divergence and oversold.
So traders are advised not to employ any long positions in current scenario but not forget to deploy the opportunity to make long positions in potential and low beta stocks near 11,400 levels if you find any reversal.