07 January 2013: Nifty Elliott wave analysis: Nifty need to spend time above 6024 levels to get further rise towards 6050 to 6074 levels. For technical support, keep your eye on 5980.

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

Today’s outlook: -

On Friday it finally hit 6020 levels in a very odd manner of trades. If it kept on trading choppy for 4-5 hours then it could be a tougher deal to conclude trades, well, so far as said it has saved 5980 and rebounded. I am plotting two different charts, one is end of day and another is hourly chart.

First talk about daily chart. I have already said that MACD is running with negative divergence and it can make its impact at higher levels. A momentum indicator like RSI is now going to enter in over bought zone. Still those are not concerning yet. I can still sense that it will play important role. This is the reason that I am advising to be cautious at higher levels of trade. It is true that it is too early to conclude about the levels from where it can react negatively.

Many traders have requested me to explain hourly chart based on Elliott wave and so I am giving. I buy emerges at 5927 and it is still having life. There are two targets which is suggesting by hourly chart, one is at 6030 and a cross over will give 6074. It is important to note that even daily chart is suggesting for resistance at 6024.

Hourly chart is suggesting that it is still in third wave of rise. so a dip will come but it will get a follow up buying from those levels.

One should note down the caution that if Nifty starts trading below 5980 then it will alter the wave views. So far nothing is concerning yet but we are on critical note. Those who are dealing for intraday must be facing the trouble of choppy trades. Those are unavoidable poison for traders. Only way to save is trade less. One must look at RSI on hourly chart. It has given multiple sell signals but failed to give a fall. Can you answer why?

Conclusion Nifty: As long as 5980 sustain we cannot hope for fall. On higher side, if trades sustain above 6020-6024 for 5-10 minutes then we can expect targets like 6050 to 6074. If we break 5980 then it can have quick fall towards 5940. In between, you are bound to struggle. Trade less and prefer second half to deal so that you can save your self from choppy trading.

S&P 500 – If it has to cross 1475 then the day is today. Long back in the late November 2012, I said that rise can extend towards 1475 but may not cross. Time has come. Let us see if it crosses 1475 or not. Suppose if it crosses 1475 then it will come near to 1500. What after that? I am sure that something will come to stop global rally very soon. May be by this month only. Be aware at 1500 of S&P 500.      

Regards,

Praveen Kumar