NIFTY: 07 May 2012: Fresh down wave running as expected. What’s next? Support @ 5000 or @ 4950-4930. Strongly suggested – No immediate shorting from 5000-4980

I have quoted this on Friday before trading hours,

“For today, I am expecting the test of 5155. If we spend time below those then we can re test 5135. Will it hit 5080? Well, that I can decide after seeing the reaction at 5155 to 5135 only.’

So have we entered on trending market with downside direction? As of now answer is strongly yes. Well, but I like to mention few points before Elliott wave direction.

• Indian market has slipped more than many other parallel indices. Indian indices will react fully on Election impact with today’s gap up.
• FII money in cash side it still on buys side with Friday’s figure on buy side with Rs 428 crs.
• Our direction will be governed by comments over GAAR.

CUES FOR INDIAN MARKET: Have a look on the comment on GAAR. If it goes in favour of market then you can see NIFTY hitting 5150 (surely I am assuming Nifty to trade below 5000). If it goes against market then NIFTY will hit 4880.

Possibility : I am saying this from past many years that current Government always try to run away from taking decision. So once again they may postpone this decision to another date. Can GOI is strong enough to take strong decision after seeing outflow in the month of April 2012? May be not.

Do not be compulsive short traders. Shorting is an opportunity with caution only. Major cues will come only in afternoon hours. We must see EU reactions after election result. No other market is down as much as Indian market.

Technical: Take a rise from 4531 to 5630.

50% levels coming @ 5080 which has broken. Now we should expect support at 4950 levels which is 61.80% retrenchment of the same rise from the top.

In between, Nifty deserves a bounce but question remains same about magnitude and period. We will see a bounce but no bounce will sustain in coming days/weeks. Depending on the bounce I will join shorting again.

Depending on market condition we will release intraday updates too. Till that time, you can post your views also so that I can present better result for you.

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Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

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