11 December 2012: Nifty Elliott wave analysis: Multiple test-and-bounce from 5890 support. Profit taking can be expected only if it breaks and sustain below 5890 for 10 minutes. Resistance will be at 5950.

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

Today’s outlook: -

It is somewhat trying to make a top but it cannot be confirmed unless we start trading below 5890 levels. To be on the cautious side, we can take a dot support at 5880. Trading pattern is still not giving confident sign of profit taking. Technical indicators like RSI and MACD is suggesting we are on over bought zone. Market stopped reacting for the intensity of buying in over bought zone but equally sell signals has yet to come.

It is showing that we are now in dull days of trades. We may remains in a small range. Experimenting nifty in such range cannot be fruitful. We will have higher resistance at 5950 marks only. Band Bollinger is suggesting for profit taking but I am strongly suggesting that one can take confirmation only if it starts trading below 5890 for sustaining basis. One must note that I am giving this support from Friday onwards. It took support in those ranges for twice in two days.

Break below 5890-5880 will give 5854 (23.60%) and then at 5817 (33.33%). In my view, one should not try to speculate for the break of 5890-5880. It is better to wait for that break to come in reality.

Few important global indices are turning uncertain. There are threat that ghost of euro zone will be back on any day as Italy seems to be in trouble.

There is no solution on US fiscal cliff. I strongly believe that solution will be come. Only question is when. Indian market is eyeing on its own reform process. Is it really coming? Market is waiting for banking reform bill to be presented on parliament in up coming few days. In another development we may hear voice over ‘reservation in promotion’ bill.   

Conclusion Nifty: Nifty hit 5950 as a dot. I will prefer to trade on short side if Nifty able to sustain below 5890-5880 levels. We can expect levels like 5854 and 5817 (already explained yesterday). It will face resistance at 5950. We may have frequent resistance on every rise. I am keeping study unchanged.

S&P 500 – For Friday, I said that a rise is coming but I am not confident. I should be confident. It came at 1418 levels. Now it will face resistance at 1424. Even if it rises then also we are going to see a possible pullback. For 2-3 days of views, start shorting S&P 500 on rise for a move towards 1400 to 1395. You should expect 1385 by this week only. Why 1385? It is 200 days moving average. It was silent Monday for US market.

Regards,

Praveen Kumar