Yesterday whole day most of the stocks faced short covering rally. From past few days, I am reiterating that Sharp rally and Sharp fall are common characteristic of Bear Market. 

In Elliott wave Principle perspective, Nifty and bank Nifty both completed minor counter waves yesterday. Major Impulsive down wave is due in Nifty and Banknifty. Both indices are now vulnerable to severe downfall. Rough estimation is fall can be double of the yesterday's upmove. Hence, minimum 250-300 points fall in Nifty and 1000-1200 points fall can be possible in Banknifty. This fall happens in one day or will it take couple of days, we need to wait and watch. India Volatility index touched 21 points in last 2 days. Yesterday it bit cooled off. VIX  above 20, considered to be Bear market. Trading range has risen. Risk increased. Normal traders must stay away from Markets this point of time till it stabilized.

 Market likely to take some more time to complete the downside fall. Long term investors already got bearish signal when nifty breached 200 DMA @ 10786. In Bear market, rallies end abruptly and down fall begins. 

Yesterday's Bounce was a clear BULL TRAP. Gap down opening today traps Bulls and force them to unwind long positions at loss and likely to force them to short sell again. In this process, markets likely to see more downfall. Keep stoploss orders to long positions and stay safe.  10550-10600 acts as stiff resistance zone. Sell on Rally Market.

            For intraday view,10500-10550 Resistance.

            Support zone 10200-10140-10074.

- Suryadev Bandari, Research Analyst

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