19 November 2012: Nifty Elliott wave analysis: Nifty has broken crucial support of 5580 in its own style. This may be the beginning for a move towards 5500. It looks like a day of out-performance has passed.

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

Today’s outlook: -

I have quoted on Friday,” Traders must keep en eye on VIX. I feel that it can able to issue us a lead signal before major fall or rise. I do not know when will it break but chances are that we will break on lower side.”

So finally we got this desired break on political concern and global concern. It took almost two months to move. I am not going to give lots of importance to the reasons of fall now. When technical break comes it can deny many things. Technical charts have certainly broken and it has proved that 5815 may not come very soon now. It is meaningless to talk abut 6000 which was hardly looking coming anytime. It was only the optimism which had forced bulls to bet for 6000.

Political concern before winter session of parliament has pushed all possible reform step back to behind curtain. SP declared its list of 55 candidates for next Loksabha election. It was the taken as a shock by market which has seen rapid unwinding. Can I bet on politics? Indian politics always run on complex and unpredictable way. As of now I can say that now we have to see the impact of ‘political uncertainty’ on every announcement coming as ‘reform’. It is going to be challenging time for Dr. ManMohan Singh.

Conclusion for NIFTY India: - I am feeling that 5630 will not act as stiff resistance. We may see some higher opening but those may not sustain through out the day. Even bulls will have to accept that now this market is on sell on rise. I need to repeat that after each steep fall we need to focus on follow up of selling. So, today’s close will define the target on lower side. In my views, test 5500 is very likely.

We need to note that VIX has already hinted for such fall. It was narrowing premium which has also acted a lead indicator of fall.

S&P 500 – I was expecting silence in the zone of 1345 to 1350. In fact, I was expecting some technical recovery. Now on Friday, it came but missing signs of strength. One must look at dilemma, that our market gave a sing of weakness when US market has given signs of silence to some recovery. I can only wish that we will have some smooth days.

Regards,

Praveen Kumar