NIFTY 07 May'12:Explanation why it was said not to short @5000-4980? A dot support @ 4986. It can recover as long as it hold.

In my morning updates I quoted NOT to short in the zone of 5000-4980. 

It hit a low at 4990 and rebounded a little. 

Nifty has few respected levels, one such was 5080 which has violated on last Friday and then technicicans were in search of the next. 

I cannot say if fall is over or not but I can say that one should expect a rebound. We might have soft magnitude. 

Where we are on Elliott wave theory. We have seen a recent low at 5136 before breaking those levels on Friday. The first upmove from 5136 went up to 5379 and then we have seen the fall. In between it has formed triple corrective pattern but kept on saving 5136 each time before decisive break. 

Hence the wave that has retreched now is a up wave from 5136 to 5379. It is retreching from top of 5379 (which I assumed)

Hence 1.618 time must be the meaningful support. It comes at 4986. 

(Few of you are intrested in Mathemetics too. |5379-5136=243 pts||243*1.618=393 pts||5379-393=4986|

Hence we rebound. If you are happy then I must update you something in advance that if this wave see further retrechnement then the next levels will be 2.618 times of 243. Which end up @ 4543. Well, do not worry about those as of now. 

Regards, 

Praveen Kumar

NIFTY: 07 May 2012: Fresh down wave running as expected. What’s next? Support @ 5000 or @ 4950-4930. Strongly suggested – No immediate shorting from 5000-4980

I have quoted this on Friday before trading hours,

“For today, I am expecting the test of 5155. If we spend time below those then we can re test 5135. Will it hit 5080? Well, that I can decide after seeing the reaction at 5155 to 5135 only.’

So have we entered on trending market with downside direction? As of now answer is strongly yes. Well, but I like to mention few points before Elliott wave direction.

• Indian market has slipped more than many other parallel indices. Indian indices will react fully on Election impact with today’s gap up.
• FII money in cash side it still on buys side with Friday’s figure on buy side with Rs 428 crs.
• Our direction will be governed by comments over GAAR.

CUES FOR INDIAN MARKET: Have a look on the comment on GAAR. If it goes in favour of market then you can see NIFTY hitting 5150 (surely I am assuming Nifty to trade below 5000). If it goes against market then NIFTY will hit 4880.

Possibility : I am saying this from past many years that current Government always try to run away from taking decision. So once again they may postpone this decision to another date. Can GOI is strong enough to take strong decision after seeing outflow in the month of April 2012? May be not.

Do not be compulsive short traders. Shorting is an opportunity with caution only. Major cues will come only in afternoon hours. We must see EU reactions after election result. No other market is down as much as Indian market.

Technical: Take a rise from 4531 to 5630.

50% levels coming @ 5080 which has broken. Now we should expect support at 4950 levels which is 61.80% retrenchment of the same rise from the top.

In between, Nifty deserves a bounce but question remains same about magnitude and period. We will see a bounce but no bounce will sustain in coming days/weeks. Depending on the bounce I will join shorting again.

Depending on market condition we will release intraday updates too. Till that time, you can post your views also so that I can present better result for you.

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Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

Mobile number – 09893369889