31 December 2012: Nifty Elliott wave analysis: It may remains directionless in 30-40 points of trades. US Fiscal Cliff – looking like US government is heading for Hindi film climax!!!

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

Today’s outlook: -

Wishing all of you and your family a very happy 2013!!!

Today is the last trading day of the year and month as well. Nifty has not done anything in December month till now. It gave buy and sell signals through out the month. High and low for the month was at 5823 and 5965 which is almost 140 points but in actual sense we hardly trade beyond 50 points of trades. Very surprisingly, FII has invested more than USD 2.5 billion in this choppy range also.

Above all, we kept on speculating on the deal over US fiscal cliff. Till now, nothing is coming and we are just few hours away from deadline. It is looking like US government is more inspired from Hindi films and preparing for last hour climax. It is not going to allow anyone to relax before New Year; we can just wait for the outcome.

Technical charts are indicating for a flip-flop. Above 5923, it will indicate for a rise towards 5965 or cross over. In the lower side it will have trading support at 5880. I have already said for the trigger as ‘5minutes trade below 5838 for fall. It didn’t come yet but this condition for fall is still alive.

Technical indicators are giving signals that we will not move out of this zone very soon. This is limiting the signs of broad movement, I need to say that ‘negative divergence’ of MACD and VIX has given signals well in advance that we may not see good rise from 5900. So far, I can say that it was the month of consolidation.  

Conclusion Nifty: almost every single market is waiting for the outcome of USA fiscal cliff. There is not deal yet and not even the signs. Technical resistance for Nifty will be at 5923. Cross of 5minutes above 5923 will give us 5950 to 5965. In the downside we will have support at 5880 and then finally at 5838. Odds swings will continue in this way. Either it is going to repeat January 2012 or January 2008.   .

S&P 500 – It came very near to my first target at 1400. I wish if Nifty would have moved in this way. Charts are suggesting that we can have last hope as 200 DMA for S&P 500 which is running in the zone of 1390 to 1385. So whatever be the outcome of US fiscal cliff, it need to save 200 DMA on closing basis. Will it save? Let us see.  

Regards,

Praveen Kumar