The content explores how Elliott Wave Theory can predict a drop of over 350 points in Nifty and Bank Nifty. It analyzes the decline, focusing on wave patterns, support and resistance areas, and possible future trends. Traders receive advice on positioning themselves based on these forecasts. Related topics include how different currencies are affected by factors like oil price shifts, UK inflation, and significant global events such as world leaders’ speeches. This provides insights into currency movements in pairs like EUR/CAD, EUR/USD, and GBP/USD.

Editor’s Picks and Market Movements

The editor’s picks summarize movements in currency and commodity markets. They highlight dips in EUR/USD and GBP/USD, as well as corrections in cryptocurrencies like Bitcoin and Ethereum. Predictions about BNB performance and Greenland tariffs are also discussed, setting the stage for future market changes. Additionally, there are overviews of the top brokers for 2026, featuring the best options for trading currencies, CFDs, and gold. The text emphasizes the importance of thorough research before investing in open markets, along with a warning about the risks and potential losses involved. The disclaimer clarifies that the opinions shared do not count as investment advice. After the recent 350-point drop, we recognize this as a major event within the current Elliott Wave framework. Derivative traders should focus on the crucial support level for the Nifty, which we pinpoint at around 24,500. The India VIX has risen over 15% this week, reaching nearly 18.5, indicating a significant increase in expected volatility that options traders can use. One possible scenario is that this decline represents a corrective fourth wave, with a final fifth wave rally likely in the coming weeks. If the market stabilizes above key support, traders might think about buying call options or setting up bull call spreads. This view is supported by strong industrial production figures for December 2025, which exceeded expectations and indicate economic strength.

Market Strategies and Global Factors

On the other hand, this drop might signal the start of a larger downtrend, so we need to be ready for a bearish outcome. A clear break below the 24,500 support level would challenge the bullish outlook, prompting traders to consider put options for protection against losses. We’re also keeping an eye on Foreign Institutional Investor (FII) activity, which has shown a net outflow of over ₹8,000 crore in the last ten trading sessions—a bearish sign not seen since last year. A similar sharp correction occurred in the third quarter of 2025, followed by a period of high volatility before the market found its direction. This suggests strategies like long straddles or strangles could help traders benefit from large price movements, regardless of direction. The key is positioning for the volatility expansion that typically follows such sharp market shifts. Global factors are important too, especially with the Reserve Bank of India’s policy meeting coming up next month. Any unexpected hawkish remarks—especially after the European Central Bank hinted at pausing its easing cycle last week—could act as a major trigger. Therefore, maintaining hedged positions or having a clear risk management plan will be essential for navigating the next market moves. Create your live VT Markets account and start trading now.

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