05 December 2012: Nifty Elliott wave analysis: Wave theory is still hinting resistances at higher levels. A trigger is required to cross 5912. Is it coming from Indian parliament?

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

Today’s outlook: -

Rise has started from 5548 and not it is facing resistance at 5900 levels. Most of the time market has successfully closing towards intraday high which is the reflection of sentiment in Indian market. This is the hope of reform and today is the day for litmus test. Voting will take place today and market is assuming that UPA government will win the voting in Lok Sabha.

Representatives of SP and BSP have opposed FDI in retail in debate but they have yet not declared their view for voting. Just think they are opposing FDI in retail when discussing in parliament and it will be really very ridicules if they vote in favaour of FDI. Market is expecting this to happen that they will oppose in debate but will not oppose in voting. If something happening like this then it is called Indian politics. You can never bet on any side. I am neutral.

What is the possibility for today in parliament? If SP and BSP give any hint that they are going to oppose government over the FDI issue then do not expect voting. Government will go for voting only if they will be confident of winning else they may defer the decision. Although, it is not likely to happen but you must know all possible outcome.

Wave theory is still hinting for resistance at 5912. Cross over of 5912 will give levels like 5950 and then 6000 levels. Currently, we are trading in 5^th wave and one must note that we may expect extension in 5^th wave also. Most of the time, market is trading with high bullish mode in fifth wave. There is no any big concern of charts yet as of now. If one has to be concerned then only vix is troubling which is indicating for one pullback. Have a look on the given chart. We need to accept that bulls are in full command even in range bound trading. We have not yet corrected by even 50 points after hitting high at 5899.

Conclusion Nifty: Then we will have technical support in the following way 5850 > 5820 > 5800 > final @ 5770. There will be few important resistances, one is at 5900. Assuming for 62% of wave 1 is giving me resistance at 5905. I am considering that 5900 to 5912 will be a zone of resistance. Dip can be the opportunity to buy. Cross over of 5912 will give towards 5950 and then 6000 marks to give extension in fifth wave.

S&P 500 – US indices are almost trading in a range but biasing has converted too negative again on the concern of fiscal cliff. We have good trading support at 1405; break of 1405 will give us next support at 1390. It looking like US market will remains dull through out this week. Till now, this dip is an opportunity to buy. Note that resistance of 1424.

Regards,

Praveen Kumar