05 October 2012: Nifty Elliott wave analysis: Another crucial resistance or target is at 5810. Crossover of 5810 should generate momentum for 5870 and then 6000. Trading support is at 5750.

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

Today’s outlook: -

Government of India is pushing reforms on fast track and cabinet approve FDI in pension and hiked limit in insurance. It is still a challenge to pass those bills in parliament. This is a short term booster for sentiment. I am not concluding that just by allowing FDI we cannot expect big dollar to come to India. Sentiments are good as government is at least doing something.

Wave theory is not showing any kind of weakness. We cannot plot wave marking as there are many big gap up opening in past few days of trades. As we have maintained above trend line for so long that even if correction comes then also it cannot be big. Technical support stands at 5750 levels. It is not looking like to see big reaction even on higher money. In my views, allowing pension fund for market is a big positive in long run. This fund is much bigger but it is still having enough doubt.

Hiking FDI limit for insurance – well, those limits was already 26% but I do not think that money is coming immediately as companies has failed to earn in this sector in past few years. It is too early to conclude. Let us see the winter session of parliament.

1. Wave charts for every stock are not looking good. Some charts are showing that they are managing current levels with just one reason that index is rising.
2.  Another important factor is upcoming quarterly result. No one is talking about those which will kick off in few days. It is a warning that upcoming number can be another set of horrible figures.
3. KFA – FDI has allowed in aviation. Is there anyone coming to bailout KFA? This is showing that what government is saying as reform is not enough. It is a big shame for our nation and system that employees family member has committed suicide because employee has not got the salary. This is when company owner is billionaire and spending money to make his life lavish. I kept on recommending ‘exit’ from KFA from 70 levels, looking on the brutal business approach.

When politics become for business then it can not only harm the society but in long run it reduces the profitability of a company. Do take a note that stock market function in most democratic way than any other system. I can say based on charts that Nifty may hit 6000 or higher levels but I am not convinced at all about the change in fundamental performance. Make the reforms in the right way and stop relying on foreign money. You can ask anyone about reform; he will say ‘FDI’ and “rate cut’. It is not going to be so simple. Government must and have to do something to reduce expenses. No steps has taken in that regards.