02 November 2012: Nifty Elliott wave analysis: Rebound continues for second day. It is still a pullback and any higher opening may fail at higher levels. We need to wait for fresh break below 5630 again?

Intraday chart

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

Today’s outlook: -

It was looking little unusual to see rebound after breaking levels like 5630. It was almost on monthly low. We have H&S pattern and n-line was at 5630. Well, I have already quoted in past two days that one pullback may come and it came. Very obvious question is that how can it sustain? It hardly matters right now. What matters most is the indices movement.  It is looking like we may have some higher opening. Charts are suggesting that we may not cross 5690 levels. There is an intermediate resistance at 5667 levels.

There is a chance that we need to wait for the break of 5630 again on fresh basis to talk about fall. It is not going to be very likely case but I cannot deny. Trading strategy is suggesting that one can initiate short position with hedging to bet for further fall.

Intraday wave progression is suggesting that we may see resistance in the zone of 5670 to 5690. Well, in my view that can have lesser buy and higher possibility of shorting at higher levels. We need to remember that H&S pattern will take its effect in coming days. Banking index is still looking weak.

There is another way to look for this market, which can be bull’s logic. One can say that market has taken out weak buyer from the market by breaking 5630. Now, only stronger buyers are present in the market. We are on last trading day of the week and we will get lots of answer today. Ideally, it should fall from higher levels. We can only hope that we will not get the pain of choppiness just like October month. We are back to same levels again?

This pullback or advance can sustain as long we kept on getting some good news flow. We are moving near to US president election date. It can make its impact on global market. Indian market had a good hope of rate cut but that has not come. That was the trigger for the break below 5630. It seems that we need that kind of trigger again. It is very clear that we may not get rate cut very soon now.

Regards,

Praveen Kumar