07 November 2012: Nifty Elliott wave analysis: Nifty has tested 5730. Cross over of 5730 on sustained basis can able to give 5757 and 5770. One needs to be cautious at current levels if it fails at 5730.

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

Today’s outlook: -

I said that yesterday was the best day to test 5730 and it did. Majority of the gain came in second half. Cross over of 5730 can give us 5757 and 5770. It is very important to note that if you see multi year chart then resistance will be at 5770 on closing basis. I need to strongly suggest that as long as we are stay above 5680, I cannot say about down side. We need some big surprise to break those 5680 levels.

What can be impact of US president election? Well, it is very difficult to conclude the outcome of such political event. In my view, if Mr. Obama wins (which is very likely in my view, although margin will be very small) then we may see sell off in US market which can drag whole world down. One must note that earlier also I have predicted that irrespective of outcome we have a great possibility of sell off after US president election. US indices are reflecting that fall on technical chart.

Strongly, Indian indices are not same as US indices. We have no such technical indication yet. In fact, our own technical are giving a biasing for bulls. Then next big question is how long can those out performance sustain? I need to draw your eyes towards the importance of some technical levels.

Draw a line at 5680. If this breaks (Which is just 45 points away) then picture will definitely change in Indian market too. I say, do not try to be extra confident on any side. Be prepare to digest any surprises. When I am talking about surprises then surely I am talking about unexpected fall. If rise comes then almost we all know what can be the condition.

S&P 500 – Draw resistance band in the zone of 1435 and 1438. Failure of this band will give the desired sell off in US market. I need to say that US market is capable enough to press panic button any time. Is there anyone talking about ‘panic button’? It does not matter to me but I am pressing this for US market for the crash of 4-5% on the failure of 1438 which is just 10 points away from current levels.

Let us see if reality comes in line with my expectation.

Regards,

Praveen Kumar