Updated: Aug 29, 2020
Refer my last post on April 30, 2020 - Milk the Markets, the target of Wave3 UP was given as minimum 11150, the estimated time I had indicated as Sep 2020, well Nifty not only achieved but surpassed the target to hit the TrendLine[TL] resistance around 11685 on 28th Aug 2020.
The moot question is what next? Will Nifty respect the TL resistance @11685 or will it breakout above the resistance and create an Asset Bubble. The rally from March 2020 lows is primarily the distortions in stock and treasury market cycles due to the massive monetary accommodation (liquidity) provided by the central banks across the world known as “quantitative easing”.
Financial intervention and engineering greatly distorts the price of securities and negates the concept of “free markets” upon which normal cyclical patterns unfold. This is the basis for the saying, “Don’t fight the Fed.”
The long term chart indicates bulls shall find difficult to jump Nifty50 above 11685. If Nifty50 starts declining from the significant resistance levels, termination of Wave3UP which started from May2020 lows, the Wave4DN shall be highly volatile & won't be easy to trade in terms of Risk-Reward ratio..
The Wave4DN has strong possibility of testing 61.8% retracement levels @10550 or 50% levels @9950 [my bets for 50%] or will it fall on the laps of 38.2% levels @9330, which is also major TL Support.
Whatever may be the case, however one thing is clear this is NOT a time to be complacent in regard to investments in financial markets, especially when longer-term significant highs are forming in Aug/Sep 2020.
In my last post dated 14th Aug 2020, the Short Trade was initiated in Nifty50. with SL @11415. Nifty tested the highs @11395 & seen a thud fall throughout the session making lows @11111, which is 284pts correction post my Sell Trade initiation, we covered 70% on the same day and carried over the balance, to exit upon Long Trade indication by our Algo, next day.
Nifty50 Short Trade @11350+ on 14th Aug 2020, made profit of +250pts on same day.
Technically the Wave3 UP gets terminated around 11350+ zone, when Nifty Aug2020 made the highs @11376 on 11th Aug2020. Nifty is ripe for correction, Wave4 DN, with minimum Tgts @10680 / 10215. will this be achieved in Aug 2020 settlement month itself... Lets see.
Refer my last post https://www.moneystock.co.in/post/milk-the-markets & https://www.moneystock.co.in/post/nifty-heading-for-11150-by-september-2020 where the Wave3 UP was predicted with the Tgts @11150 minimum.