29 November 2012: Nifty Elliott wave analysis: I kept on saying for buy and buy from past six trading sessions from support of 5550. Now crossed 5720 too. It is looking to hit 5800 or nearer too. Do not short this market.

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

Today’s outlook: -

I gave the support of 5550 well in advance. We kept on trading with positive bias from 5550 levels. It took just six days to come at 5730+ levels. Readers must have enjoyed a handsome profit. Technical charts are still suggesting for further advance. In the given charts you can see that MACD has emerges its buy signal in the last trading session. Till now things are looking safer in my views. I can sense some more rise even from current levels. Why cannot we hit 5785 to 5815?

One must remember that we have December month ahead which has a history of being good for bulls. It is giving me the sense that November month has formed its platform.

Note that we have one full eight waves Elliott cycle which has ended at 5548 and now we are in the new wave progression. There were little hope on Tuesday about parliament and we have seen shoot up of 90 points. Now, it is almost clear that government is now confident about numbers and they will go for discussion on ‘FDI in retail’ under rule 184. End of deadlock in parliament might be the trigger for the beginning of a rally.  

By Monday-Tuesday only, we have forecasted that government will try to convince DMK and BSP to get their number and will go in discussion under 184. Things are almost shaping the same ways. SP might try to stay out of voting (as they were by mouth in opposing FDI in retails).  

What Elliott wave is saying? If I assume that 5548 is the beginning point of new up wave then this rally may have some bigger length. It is just the development of first up wave. Do you want to get the idea of length? Look at the chart and its previous wave. First wave begun from 4770 and end at 5180 roughly. So the total length was 2.618 times of waves ‘1’, which end at 5815 as top. So based on that we may see levels near or above 6050. Sounds so interesting? How can stock market move in simple ways? You can expect something to bring challenges in between. Only time can answer what can those be.

Conclusion for Nifty – I try to be in the long trades for most of the time in past six trading days from 5550. I am still having long positions. I will prefer to hold my long deals. Remember one correction is coming but those may have not have length great than 60 points. As I said above, we can expect nifty to hit 5785 to 5815. Even 5700 will act as good trading support. At the beginning of the week, I spotted target as 5700 to 5720 for the week but those are coming well in advance.    

S&P 500 – It has given another up towards the support of 1390 to 1385. This support was mentioned. Do not expect sharp rise everyday. Now rise will come with consolidation but this might be the good beginning for December months. Do not afraid in advance, US people will surely handle fiscal cliff.     

Regards,

Praveen Kumar