03 December 2012: Nifty Elliott wave analysis: Wave moved by 330 points higher but now we are now moving towards resistance levels. It is not looking like to break strong support of 5770. I will buy in dip.
You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Let us accept one fact that whenever
Nifty has formed top it was backed by some positive trigger. Technical charts
are still not giving signs of weakness yet. It is still forming higher high. Most
important is that from past three trading days it is closing on almost intraday
high.
Today is going to be another
important day. We have traveled for eight trading sessions after hitting 5548. This
rise is too sharp after recent two months of consolidation. We have seen
massive buying by FII. Fortunately dead lock has also ended in Indian parliament.
So far, it looks so rosy.
Market need to take few cues now
before voting on FDI in parliament. Market is betting for the continuation of
reform process. Technical charts are suggesting that we are almost coming
towards resistance levels.
You can check the given chart; I have
restructured the wave formation as we are moving higher above 5815 levels. We need
to note that ‘expecting correction’ is speculative in nature, not based on
technical. Traders must note this fact that I am assuming something in advance which
is not reflecting on charts yet. It does not mean that I am not completely
going anti-technical move. With such sharp rise, few momentum indicators have
entered in overbought zone.
This rise is still expected to
continue as prime momentum indicator MACD is just giving a buy signal but we
all know that this indicator can take time to come in effect. Nifty has moved
by more than 200 points after giving a buy signal.
Can we see the impact of global market
on Indian market? May be not, as it is still going to take domestic cues. Still
it can see partial impact. Market is too encouraged to see further rise but
those may not be very impressive.
I want to see pullback to buy again.
It has risk of triggering stop loss if I add fresh long from 5880.
Conclusion for Nifty – Even on
Friday it has moved from 5815 to 5880 levels. So, we have seen three big days.
Market will go under phase of consolidation. I am saying to short immediately
but be cautious at higher levels. It will have maximum permission correction
till 5770. It is just based on technical I just give up my long trades which I took
near 5550. Now I am planning to buy dip only.
S&P 500 – I have already
forecasted for consolidation and choppy moves for US market. Those zones of
consolidation will continue in the zone of 1405 to 1424. I can sense a target
of 1445 after the end of this consolidation. I do not think that I need to
change my views on S&P 500. We have seen another silent day on Friday.
Regards,
Praveen Kumar
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