08 October 2012: Nifty Elliott wave analysis: High was 5815 which was just close to my mentioned resistance of 5810. Close below 5750 is concerning. Earning season will be litmus test.

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

Today’s outlook: -

Friday’s low of 4888 is showing just one thing and this is the failure of national stock exchange. No excuse please. 10% circuit breaker failed, 20% circuit breaker failed and then also justifications are coming. Well, if you are dealing in India then you have to accept it, it does not matter if you like it or not. Clearly, I do not like this kind of things.

Let us back to the charts. I studied technical indicators on Sensex as Nifty is right now influenced with freak low. I can still say that Nifty has closed on concerning note only. We must note that Nifty has generated a technical wave which should be down and it can expect to hit 5640 levels. 5815 will remains a tougher short term resistance. It is clearer on the chart study given. There are important points which we must note with the beginning of this week.

1. Few global majors have either issued profit warning or close to do that. When stock market has awarded stock price on optimistic note, we cannot afford anything below expectation. If it comes (which is very likely) then there will be strong possibility of pullback.
2. It seems that we have almost forget about the possibility of shooting inflation from the day ‘process of reform begins’. Market must want to see how RBI is going to manage ‘growth’ vs ‘inflation’ equation? Mr. Ben Barnanke is visiting India. 
3. FDI was announced in ‘insurance’ and pension’ on Thursday. No one was talking about those on Friday. Why? This question and lots of answer. I have expressed my views that FDI has lesser reforms and more myth. Government must try to lower down expenses to control fiscal deficit. When money start coming then we will count but as of now things remains same.
4. RSI – this is going to be very important to watch. We have two sell signals and now very close to give third one. Market has already denied it twice. Third sell signal may be crucial for charts. I will be in better position to confirm after today’s close.
5. S&P 500 – I always believe that broader indices always give better idea. My studies on S&P 500 are saying that 1475 will/may remain crucial top. Few days back I said that 1475 may be yearly top. Till now, that study is valid.

In my views, Indian stocks should try to react before results as there was nothing in past few days where I can expect for good or optimistic result. Well, those are my assumption but market might have different views. There is nothing concerning big on technical chart and it is still showing that it may try to recovery after one dip. There is still a condition, Nifty need to stand above 5640.

Some one might say that all gap up has filled on Nifty chart with freak low on nifty charts.