Bihar state election outcome only resulted in a temporary Gap down which was almost filled by end of the day and prices resumed downward journey from the point where it has left.
Below is the part of the research report published every day morning “The Financial Waves short term update” before the election outcome..

Nifty 60 mins chart: Anticipated on 9th November 2015 before Markets opened

Nifty 60 mins chart: Happened as of today

Wave analysis:

Nifty moved exactly as expected irrespective of the big event of Bihar election results. Following was mentioned in the morning of 9th November 2015 before equity markets opened
“In the last session high Volatility was witnessed where Nifty showed up move towards 8000 level in the first few minutes of trading session and post that reversed on downside sharply towards 7926. Post that throughout the day prices traded in a range.

Post the Bihar state election outcome we can see a Gap down opening after such a poor performance by BJP. From Socionomics perspective such extreme change in sentiments clearly hints that the correction currently ongoing in equity markets is of higher degree. It is surprising to see that it was just in 2014 where BJP had landslide victory at the center and now people are again shifting their perspective. Stock markets also reflect the social mood which does not look very good as of now.

Indian equities formed a major low in August 2013 and touched high near 7563 levels on the central election result day. The rally started 8 months prior to the Election Day outcome. Coincidently currently the downtrend started 8 months prior to the Bihar election outcome which looks to be ending the era of optimism on the existing government. Case in point is sentiments, social mood are cyclical and governed by patterns. Cycle analysis has so far helped us to stay on the right side of the trend and the existing short positions can continue to use trailing stop method to keep riding this trend on downside.
As shown on hourly chart, prices are moving lower within the red corrective channel and forming complex correction. The next support is now directly near 7790 which is the lower end of the channel and is also equal to the first correction marked as (w). One should avoid catching a low in case the sentiments turn extremely bearish and it is prudent to stay in that direction as of now. Cycle analysis that is explained in detail in current monthly update shows that an important low will be formed only by the month end and before that panic selloff cannot be ruled out.

Existing short position should use 8020 as stop and look at levels on closing basis. Volatility can be high as we are already in downside move along with an event outcome which is associated with increase in average bar size.
In short, we continue to stay bearish after prudently capturing the top near 8150 – 8200 levels using the objective techniques. Avoid catching a low and ride the trend as long as it lasts!” BANG ON!

Happened: Nifty continued to move lower with increase in the bar size. Today’s selloff towards 7770 only shows that events do not drive the trend as prices recovered after selloff yesterday and resumed the downtrend from the level it was supposed to do so before the event.
We have been bearish from the highs of 8150 – 8200 levels and now Nifty has fallen by nearly 400 points from there. Time cycles, Neo wave, Elliott wave and other technical tools helped us to capture this down move prudently this time as well.

Do not be surprised now to see bearish news across and how economy is in doldrums. News and Economic data are lagging indicators whereas stock market is leading. Elliott wave patterns help us to stay objective and forecasts the future rather than looking only at the past data.

Subscribe NOW and see yourself in the past archive why we turned bearish near the top and where do we expect this trend to go and end. Time is also crucial for a trader and we have mentioned a distinct time zone by when this correction should end.

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