21 November 2012: Nifty Elliott wave analysis: Nifty has tested 5550 again and almost forming short term double bottom. Do not short near 5550, a bounce is on the card now. Expected range is 5630 to 5650.

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

Today’s outlook: -

I have already suggested for a possible recovery for Nifty yesterday only. We opening positive but slipped and then suddenly market rebounded in last 30 minutes of trades. We need one positive close to claim for a recovery. I am still suggesting noting a fact that we need minimum one positive close.

Can I say all turn rosy now? No, problem is coming from political front. Winter session of parliament will begin from tomorrow. There is a threat for ‘no confidence’ motion. I do not think that it can come but talks are still on. Problem for stock market is that can we expect another forwarding step towards reform? Challenges are so big for government of India. Pressure tactic by opposition and alliance partner will push government on back foot. Be ready for another hue and cry by 545 gentleman of India. Do you know that government has planned to table 25 bills in winter season?

Few such developments deserve mentioning. RBI refused finance ministry’s demand over SLR. SEBI instructed to close mini option contracts.

Traders need to observe the movement on RSI. It is stopping at current levels. One positive close can make it in favour of bulls. One must note that I am already saying that we will remains in 100 points of band. It can be 5500 to 5600 or 5550 to 5650 levels.

Conclusion for NIFTY India: - As long as 5550 support holds we can hope of rebound. This rebound may not have great life unless we get minimum of one positive close. Do not short at lows near 5550 unless it breaks decisively. Today, it might open with small gap but that will be important. Be ready to show your courage and patience as winter season for parliament will begin from tomorrow. One should avoid unnecessary adventure. I am still not denying for selling from higher levels as we have still a lower low pattern on daily chart.

S&P 500 – I was expecting recovery in US market recovery and it is coming. Note that as it has 1345 (which was mentioned on our articles well in advance). I am expecting a rise towards 1400-1405.

Regards,

Praveen Kumar