As per 1st April 2016 Update- “India Nifty-Please Save Me”….It was mentioned that bulls will be hurt again- which came true because market was giving that indication & evident by slow momentum indicators like RSI, MACD.
That is the reason when prices started converging along with negative divergence which was more visible since 30th March 2016 in lower time frames - It answered 60% of my doubt whether this move from 6825(Started at Y-Leg) to current levels 7700(XX-Leg) is impulsive or corrective- The answer which I got was corrective as it appeared like 3 (A-B-C) waves as compared to impulsive -5 waves.
Yesterday, When RBI reduced repo rate by 25 bps- which market already expected & came no surprise for markets- Nifty had temporary upside push which did not sustain for long time & prices going down below 7700 –was first bad sign on intraday basis(As mentioned in previous update- USDJPY: Mirror for India Nifty).
There were lot of clues from other financial instruments like USDJPY which is currently running into A-B-C structure: Historically, JPY becoming stronger as compared to U.S. Dollar is bad for Asian Markets- This was the night of 4th April 2016 when USDJPY was firstname.lastname@example.org which broke to 110.50 – further confirmed that 5th April 2016- RBI Policy Day will not produce goodies for market & I was ready to execute on the dawn of 5th April 2016- Bang On….
What Happened Post RBI Policy on 5th April 2016
Nifty had an impulsive fall of more than 150 points & came close to our most concerned level 7580 as per previous updates-Prices going below 7580 shall be negative from short term – to medium term. Now, unless Nifty goes above 7800- we should avoid going long or bulls will be hurt again.
Intraday Strategy- On Intraday basis, Nifty going below 7580 – shall touch 7530 & later 7480 as possible targets with strict stoploss of 7651.
Long Term Strategy – 7400 shall be key support level for India Nifty- If broken, shall confirm that we have started 3rd Standard correction since 9119 High made on 5th March 2015.
Abhishek H. Singh, CMT
India Regional Manager
India Markets-BSE, NSE chat room- https://in.tradingview.com/chat/#b4sFOMIVqPkq8gfQ