Thursday, July 10, 2014

Budget Impact on stock markets! Why is Nifty falling?

The analysis will start on what was expected in Budget and what was delivered.
strong negative close today will result into following news:
“BUDGET fall short of expectations with no concrete plan to reduce Fiscal deficit even when aggressive targets are given”
If equity markets manage to close positive and recovers from the lows following can be probable news we will hear or read:
“BUDGET addresses all the important aspects to revive the economy. A very balanced approach is shown by the new government within its 45 days of Budget. Markets are also optimistic about the efficient execution of the proposed plans”
The news will be focusing on negativity if Nifty closes in red whereas it will focus on positive aspects of the event if Nifty closes in green. Case in point: is news will change based on the outcome of the markets which is leading. We believe that events can result into spikes but that lasts only for few mins or few hours or few weeks and eventually the trend resumes.
Taking trading decisions based on news can be disastrous as news can change to fit the market movement. Even a very well drafted Budget will be perceived negative if there is across boardselloff and viceversa. We use Advanced technical analysis concepts like Elliott wave, Time cycles, Channels, Fibonacci ratios. The below chart was shown on 23rd June 2014
Nifty daily chart: expected since 23rd June 2014
Happened as of today: 1 pm
Nifty made a top at 7808 and reversed from there. Index witnessed a fall of more than 220 points from there making a low of 7479. We do not rule out short term spiky movement during the Budget but a trend should emerge probably by tomorrow after the event news is digested.
On downside 7500 will continue to be an important level to watch. But will Nifty manage to protect it? To know what can be trend from here and how we expect the month of July to span out subscribe to “The Financial Waves short term update”.
Attend the 2 days training session to be held on 12th and 13th July 2014 in Mumbai on Applying Elliott wave Time and Price concept and how to derive trades. For more information contact us at or call us: +91 22 28831358 / +91 9920422202. For more details visit 


  1. I found your analysis really interesting. I wish if you could post some latest market trends.

    1. Pls subscribe at to know the latest trends for Nifty and stocks