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Short-term traders are advised to remain light in case Nifty hits 12K in September
September may not be a stronger month and should ideally witness profit booking as the rally is stretched on the upside
In line with our projections given in these columns in the last two months, the move was pretty strong but we should not forget that such a move was seen after witnessing an extremely range bound activity in the months of May and June.
So, September may not be a stronger month and should ideally witness profit booking as the rally is stretched on the upside.
This is the 9th week from the lows of 10,556. This kind of vertical up move was not witnessed in the recent past atleast from June 2017 onwards as all the rallies perished after 6 – 8 weeks paving the way for multi-week correction.
However, by looking at larger trends we draw a lot of comforts as this rally has legs on the upside. In Elliot Wave parlance this leg of the move is clearly looking like a Wave 3.
It means that any correction in the form of Wave 4 is going to present an opportunity to create fresh long positions as one price cycle will end only after the completion of 5 legs.
It is difficult to project where exactly wave 3 is going to end. But, taking different parameters on short-term charts we can conclude that this leg of up move is nearing its end which should be followed by a multi-week correction.
So, the short-term traders are advised to remain cautiously optimistic as this rally is already 9 weeks old and appears to be having limited upsides.
On the upside, there is still room, and in case 11,760 is breached Nifty will head towards 12,000. But, the correction post this upmove from whatever point it unfolds is going to be sharp and is likely to last just a couple of weeks.
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