Consistent with our high priority wave count outlined in our last post, where by we have finished a 5-wave impulse move around 7600 and the correction from highs around 7600 is a wave 2 correction. One may consider going long around current levels of 7285-7315, with a strict stop loss below 7240 for a complete reversal of this correction. A break of 7240 would invalidate our high probability wave count and hence this is where one should exit the trade. The potential loss is around 45-75 points if the stop loss is hit, while the upside target for this trades are at 7365,7455, 7508 and 7600. Though if this reversal were to occur our long term wave count for nifty would stand to be validated and we can in fact expect much higher levels than 7600 in the next 2-3 months.
Disclosure: We have long positions in index options and stocks.