20 December 2012: Nifty Elliott wave analysis: Traditionally Nifty is again turning choppy. No great monthly change. As long as 5900 hold we can still expect rise. Market may loose patience very soon.

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

Today’s outlook: -

I have already said that this is ‘Paralysis of Analysis’. Look at what has happened yesterday. After a strong rebound on Tuesday, it just turns choppy when expectation was very high. It is giving all signs of tiredness but still not turning weak. Any indices or stocks cannot be termed as weak as long as those kept on standing near high.

I have experienced this in past also that longer choppy movement can cause some change in technical indicator’s behaviour. MACD has given sell few days back and not it is immediately trying to be on positive side. Over all things are like we are still standing near short term resistance. I am feeling that things will change a lot if we stand above 5967 levels, which I have already discussed in recent past. I still believe that I cannot ignore the development of possibility of negative divergence on MACD.  

We need to note that we have not corrected by more than 33% in the rally which has length from 5548 to 5965. There is an interesting fact that Nifty is respecting a lot to 20 days exponential moving average. If Nifty breaks 5900 then we can hope for correction.

Intraday dull trading is something which can be tougher to deal. Get ready to see the impact of Gujrat poll result. Some indication – BJP will win this election by getting only 100-110 seats. It is suggested by some sources. Any shock above 120 will give some good time. Personally I believe that BJP should get 125+. Congress is keeping eye on HP results. Stock Market will take it positive if BJP get stronger.

Conclusion Nifty: I strongly believe that we may see this market loosing patience. Technical resistance will be at 5950 to 5967 levels. Technical support will be at 5900 marks. I can be concerned for fall only if breaks 5900. Nifty December future can be weak only below 5924 levels. Will it break?

S&P 500 – I have already discussed above 1445 few days back also. It has failed to close above those levels for second session in a row. I believe that we can think about Santa Rally only if it managed to close above 1445. Now we may see S&P 500 correcting towards 1415 in coming 2-3 trading session. They are still failing to solve fiscal cliff. These policy makers’s are testing the patience of market.

Regards,

Praveen Kumar