13 December 2012: Nifty Elliott wave analysis: Nifty kept on trading in a range but it is likely to see a fall. It will fall towards 5817 to 5770. Every rise will have stiff resistance in the zone of 5910 to 5965.

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

Today’s outlook: -

Nifty closed on dot at mentioned crucial levels of 5888. It has slipped again from higher levels and giving a hint for this profit taking to go deeper. Technical charts are still suggesting that we may try to go lower. I have already mentioned in my past studies that it may test 5854 and then 5817 at the break below 5890. Condition has fulfilled but movement is still dull.

FII has bought INR 952.75 crs and DII sold INR 365.60 crs.

Look at another important event. October months IIP data is more than 8%. Is it sufficient to say for rise? We need to remember that it has lower base effect and October was a festival month. I can still say that those data is a much better data (if there will not be revision later). If IIP were good then we have another poor inflation data where market got CPI just shy at 10%.

It is not fair to assume for rate cut now in the month of December. I am still thinking to buy the dips but now I will prefer to take fresh decision after seeing the magnitude of dip. Technical indicators like MACD are looking troubling. It is giving a possible negative divergence. I doubt if we can hit 6000 market very soon.

In another important event, I cannot ignore political situations now. Our economy wants better and deserves attention but politicians are busy for some discussions which might create further dead lock in parliament. I am talking about ‘reservation in promotion’ bill. In my views, I am still not convinced that current government may fail to march ahead with reforms.

Our market may not follow global strength. Technical shapes are not very encouraging.

Conclusion Nifty: I need to adjust some levels but views need to be same. I will consider 5930 < 5950 and 5967 as crucial resistances. Every 20 points rise will face stiff resistance. I am assuming for towards 5854 and then 5817 levels. It will be a better idea to keep selling on rise. It is very logical to expect price correction after 400 points of rise. I do not think that I need to change my views in 8-10 points.

S&P 500 – It has extended to hit almost 1435. It is a full 90 points of swing for S&P 500. I need to say that cross over of 1424 is giving a mild buy but will create a top which will sold very soon. It can happen anytime now. Take a note that we may re test 200 days moving average which is at 1385. One can prefer to keep stop loss above 1445.

Regards,

Praveen Kumar