15 November 2012: Nifty Elliott wave analysis: Nifty has broken its crucial edge of 5680 on Diwali day. It is the beginning of re test of 5580 levels. Trading resistance 5690-5700.

(All subscription are opened now on auspicious occasion of Diwali, opened from 09 November 2012)

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

Today’s outlook: -

I was definitely expecting a mild recovery on Muhurat trading day but it turn critically negative. People prefer to buy gold but not equity.  This is a critical development as it is reflecting that retail participation is low. News flow turns suddenly negative. Most of the data flow is turning disappointing after US president election. It was expected. Just think why?

Dow Jones lost 1100 points from its recent peak and it is now sitting at 5 month’s low. It is still true that Asian market has not seen any great impact yet. I have already said about S&P 500 that 1475 would be a yearly top when it was at 1460+. It was too bold statement to make at that time. It is equally true that I was expecting impact on India’s premier Nifty too but that has not given anything great yet. We are almost in the same range of 5650 from past two months of trade.

Looking on critical development I am considering that close below 5680 will push us towards 5580 again. You can sense that base for this market is shifting lower. I am place immediate resistance at 5700 marks. I was not bullish from higher levels. Take a note that out performance has also a limit. You cannot expect great stretch on Nifty against US indices.

Now this is time to press panic button on European market too. Can I ask panic button India? Unfortunately, there is no such sign. We are in the range and we will be in the range. Only some band shift can be possible as shown in chart. Previously we were trading in the zone of 5630 to 5730. Now we may trade to 5580 to 5650. When I am saying those then definitely it is based on yesterday’s close. Things can be troubling for bears anytime.   

Inflation data for October month came at 7.45% against 7.81% of previous month. It was too good to believe. This is only positive that we can talk about.

S&P 500 – It has broken 1370 yesterday with ease and given a shock to me also. I have quoted earlier also that 1475 would be a yearly top. Now it is standing at 1355 levels. I have issued panic button for US market just from US president Election Day. It seems it will take a rest at 1290-1300 levels.

Conclusion for NIFTY India: - We closed below 5680 levels. I said, “Confident fall will hit only below 5680. If it sustain below 5680 then we can see the fall of 40-50 points and it may try to reach the levels of 5630. Before you get panic, I must say that there is no big threat for big fall.”

Containing my previous conclusion, I feel that band is shifting lower. It may try to test 5580 which is a short to medium term support. Will this market break those levels too? Yes, it may do that.

This market is about to digest levels to levels. Range bound activity will continue.

Regards,

Praveen Kumar