22 October 2012: Nifty Elliott wave analysis: Will the big fall in US market give us a trigger to break below 5630? Even if it comes then also it may not be that easy so still watch out for 5630.

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

Today’s outlook: -

Nifty has neither yet broken 5730 on higher side nor 5630 on lower side in past nine trading sessions. It is more than enough to irritate traders. We have a high at 5711 on Friday with a low at 5660. We got single biggest fall of past four month in US market. Question is that will that be enough to give break below 5630 on Nifty? We can speculate about but those but I am still feeling that it may not be that easy. Although, I want it to break to move out of this trading ranges.

What has driven fall in US market? It was poor quarterly numbers which hurt the sentiments most. We must note that even European market has closed 1% lower. We need to note that all those concerns are coming after best efforts by policy makers. I have earlier also that what’s if they fail? Can we expect another set of stimulus? No one wants to think even in that line. We cannot run away from those ugly situations in coming future but it will take its own time to act.

S&P 500 – It was quoted for a bounce on the save of 1424 for a target of 1460. It did its target and then took the expected down turn. It came again at 1432 levels. Study turns same again. Now technical support will again stand at 1424 to 1418 levels. This is crucial support for short term. Once we slip below this support then we can expect a further fall towards 1400 to 1385 levels. We need to note that US market is perhaps one of the worse earning session in recent time. You can say that this is perhaps worse earning in last 10 years.

For Indian market, Nifty will again try to find support at 5630 levels. Looking on SGX Nifty it is looking like that we will see the opening near to or above 5630. Trading will be very interesting after that. FII money flow has lost its intensity in past few days. We got 2 billion dollar in Indian market in current month series and index almost remains unchanged.

For today views are as follows for trading. Do not short near 5650 to 5630 ranges. It is better to wait for the break below 5630 to initiate fresh shorts. Who knows if it takes another return from those levels as it has happened too many times. Derivative expiry will start making impact from today onwards. Will we get expiry near 5555 levels.

Regards,

Praveen Kumar