14 December 2012: Nifty Elliott wave analysis: Day after day, technical charts are confirming for a pull back. So far, target is looking like to hit 5770 to 5757 levels. Shall I buy lows?
You must read previous articles and
watch the given chart carefully to understand this article completely.
Today’s outlook: -
Nifty has suddenly broken yesterday
to close at 5851 levels. I have already indicated in recent days that break
below 5890-5888 will dive it towards 5854 to 5817 levels. I am feeling that we
are moving towards those targets or supports.
One thing, if downside is the
direction then, breach of one support will open scope for the next. So, it is
not a good idea to predict a bottom so I am using some approximations from Fibonacci
series and counts to get some idea for my short deals.
Yesterday FII bought INR 1256.57 crs
and DII sold INR 665.67 crs in cash market. I have already said in past also
that you need to study derivative also to conclude something. This kind of fund
is just information and should not be used for conclusion. FII are trying to be
bullish but they are not very confident.
I hear that government has passed
land acquisition bill yesterday. Is it going to give some positive impression? Of
course yes but unfortunately our market seems to be discounting that positive
news. After a limit, technical indicators start dictating. Do take a note that
every single step by government may be overlapped by ‘reservation in promotion’
bill. Market was assuming few weeks back only that it was a done deal. Cabinet
has cleared the bill but few state governments might object on it. You can hate
politics but you cannot ignore. People will surely name newer land bill as
anti-farmer. It will be a newer set of drama so market should not over react.
Have a look on the given chart. Sell
signal came from another technical indicator. It is parabolic SAR. This indicator
is giving sell after real long time. So, shall we give up for 6000? In my view,
a pull back was needed and it is coming. After the end of fall I can be in the
better position to say. Right now, I am on short side. MACD has not yet given
sell signal yet but very close to give. If this sell signal comes then it will
be negative divergence.
Conclusion Nifty: So far it is moving the way we
have predicted. We have seen a high at 5965 while I gave a range of 5950 to
5967 as resistance. Now I am targeting Nifty for 5770 to 5757 levels. Why 5757?
You need to note that 50% from 5548 against the rise of 5548 to 5965 will be at
5757 levels. I am saying that half of the rise should be washed out. It has
definitely tested my patience on short side.
S&P 500 – I said yesterday that keep stop
loss at 1445 and turn short. I took some short position day before yesterday
above 1430 (some asked me what’s the use of S&P 500? Please not that
S&P 500 future is trading at NSE). My first technical target will be at
1400 and then at 1385. If you remember, it was given in our weekly study too. It
does not matter what Mr. Ben Bernanke is saying. Please solve fiscal cliff as
soon as possible. Do not give a chance to the market to speculate.
Regards,
Praveen Kumar
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