03 January 2013: Nifty Elliott wave analysis: Nifty hits 6000 marks after 2 years. So far trend is up and now the next thresh hold will be at 6020-6024 levels to take a move towards 6100 too. Support is only at 5980 and 5940.

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

Today’s outlook: -

Nifty hit 6000 marks on very second day of 2013. It has encouraged traders as well as investors. US deal over fiscal cliff has given a global push. We have seen massive gain in European market as well US market. Comparing those Indian markets has not reacted much. This has happened perhaps because we are already trading at 20 month’s high.

Technical indicators are still not concerning. In fact, MACD has given a buy signal yesterday on daily chat. This is always treated as lag indicators but it cannot be ignored. It is important to note that none of important technical indicators is yet in over bought zone. We can expect pause in the worse case at higher levels but there is no indication of price correction.

It is a good idea to add a long at suitable levels and then kept on trail those long. One can get opportunity of adding short or long for intraday but traders should not opt to forward short as long as trend remains up. One should note that this market has potential to move towards 6100 and then even 6186. Next question is about the support.

First immediate support will be at 5980. It is going to act for intraday. Can we say that every problem has solved for the market and we should wait for much higher targets like 10%? It is not like this way. What I like to say is that do not be over optimistic. Even if we talk about 6200 or 6300 whose are just 3-4% rise from this time.

I am equally adding that we may see another newer high today but market can react for profit taking from higher levels. Even if it has to happen then also it can happen only from 6020 t0 6024 or little earlier.

Conclusion Nifty: Trend is still up with some target near 6020 then 6024 will act as next threshold for move towards 6100 marks. Important trading support will be at 5980 levels while short term (say 2-3 days) support will be at 5940 levels. No technical indicators are concerning either on daily chart or on weekly charts. We can see some intraday development on hourly charts at higher levels.  

S&P 500 – I talked about 1470 as target and it came very near to this in just one blow up rise. is this good? I cannot say but this rise is making market more confident. Now my call is that S&P 500 will try to come towards 1475 but fresh long should be taken only above 1475 on sustained basis. One need to remember that we bounced from nearer to 200 DMA. So far so good and nothing concerning yet a reaction against such sharp rise will be good if comes. Those need to use as opportunity to add long.   

Regards,

Praveen Kumar