Nifty-Highly volatile session has been witnessed due to political event :: HDFC Securities

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Crucial Supply Zone of 8650 is becoming tough Resistance! Day’s action formed an indecisive candle as the candle’s body and upper shadow are equal. Technically, highly volatile session has been witnessed due to political event. Index opened with a down gap and recovered smartly and fully covered the gap witnessed on Monday. The level of 8650 is getting stronger as index didn’t close above that level and there are couple of resistances are placed in that area; 21 Day EMA, gap resistance and change of polarity line. As long as index stays below 8650 the prevailing falling leg will not be damaged and the index could continue to slide down towards 8430 – 8300 levels. After end of this falling leg there was a hope that index could attempt to cover this gap in next retracement rise. Now that is ruled out as price has covered the gap fully. Index is hovering around 100% projection level of last two legs and next target of 161.8% level is placed around 8300 range; this level also coincides with the gap zone spotted on Jan 15, 2015. As per Elliot wave, we are in major falling leg in which “wave i/a” ended at 8704 and “wave ii/b” ended at 8838 and now “wave iii/c” is in progress. It seems like “wave iii/c” itself is subdividing into five waves which is worst bearish scenario. This we could confirm in a day or two and in this case it may not halt at 8300 – 8200 band and we could see larger selloff before budget.


LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3011288