04 October 2012: Nifty Elliott wave analysis: Crossover of 5676 has given rise. Now crucial trading supports will be at 5690 and 5638 (~5630). Trading resistance will be at 5751. If correction has to come then it can come today or tomorrow.

You must read previous articles and watch above chart carefully to understand this article completely.

Today’s outlook: -

We have seen muted movement yesterday on some hopes and some fears. Technical support will be at 5690 levels. Break of 5690 may drive us lower towards 5638 (~5630) levels. As of now, it is seems that no correction can put us below 5638-5630 levels. It means that we are not going to get more than 100 points of correction.

On higher side, it may try to hit 5751-5760 levels. Crossover of 5751-5760 will give a thrust a move towards 5800 levels. This is a view but things are not as rosy as it looks. RSI has given sell signal ‘twice’ in past few days. It generally happens near to short term top. There are histories that RSI need to give three sell signals also before giving final dip. Looking on all those developments, I need to conclude that today and tomorrow will be crucial for trades. If correction has to come then it should come in just two days of trade.

There are chances that after a correction, market may try to ride again. Suppose, if fresh rising wave starts after a dip then logical target for Nifty will be near to 6000 levels. Now there are some factors which we need to be noted.

1. Crude oil - It is falling on the fear of slow down so the reason of fall is not good. It might be too early to say but this kind of fall was hall mark of topping stock price.
2. S&P 500 – There is a short term high @ 1475. There are talks for hitting 1550 levels. We are just few points lower from those levels now. Suppose if S&P fails to cross above 1475 then there are chances that it becomes yearly top. Is it really going to happen?

Now we need to see the technical development in coming days. One can conclude that one more thrust can give fresh rising wave. We must note that wave theory can tell you that we might see the beginning of new wave. For today’s trading watch out for support at 5690. Let us see if it corrects in two days of time including today. We can able to calculate the magnitude of wave next wave after those corrections only.