Expect the ongoing corrective wave to eventually terminate within the 11270-11170 zone
1. Bull market or bear market?
We believe that the ongoing decline which commended since March 22, post establishing the high around 11572.80 qualifies as the end of the third wave and commencement of the fourth wave within the ongoing bullish structure. Expect the ongoing corrective wave to eventually terminate within the 11270-11170 zone. Hence expect the markets to remain in the bear grip for a while now.
2. Stocks likely to be in limelight today?
Reliance Industries (RIL), Dish TV, IndiGo, Jet Airways, Aurobindo Pharma, Dr Reddy's, CEAT, Mahanagar Gas.
3. Sectors likely to impact market today?
Rate sensitive's like Banking and Auto could continue to slide along with Metals while Pharma could be a hideout for participants in the short-term. Oil & Gas stocks could also contribute to overall market volatility.
4. Your mid-term view?
Nifty is locked well within a 5 wave bullish structure which commenced post the establishment of a low on October 26, 2018, at 10004.55. The 5 wave structure on the larger degree is expected to extend beyond its current life high of 11760 and could witness levels close to 12000 once above the same. We expect the current decline to establish a higher ground for the next elevated move beyond its recent life highs. Hence the mid-term outlook remains bullish but fresh longs should be added once firm signs of exhaustion or reversal are evident on the absolute price scale.
5. What drove markets on Monday?
Global cues remained the key contributor as most of the world markets started the week on a weak note due to increasing concerns on the sustainability of growth. While the strengthening rupee and crude affected the sentiments domestically as our markets witnessed a decent corrective rally close to around 1% which contributed towards the corrective wave which commenced on Friday post establishing the recent high around 11572.80.
Aasif Hirani, director, Tradebulls Securities
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