09 January 2013: Nifty Elliott wave analysis: Nifty has bounced from 5965 but this is not going to sustain for long. Stiff technical resistance will be at 6024 and 6042. .

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

Today’s outlook: -

I have said yesterday that if it sustain below 5980 then we can expect fall to hit 5965 first. A further break will give 5940 to 5915 levels.

It took a pause at 5965 and then bounced. Before bounce it has traded with great degree of choppiness. I have already motioned that on hourly chart we are on forth wave which is going to be sub divided into three parts. So it seems that it was upward corrective ‘b’ wave. There is another possibility that this upward wave may truncate.

I have already highlighted that on daily chart all most all momentum technical indicators are looking concerning. Those moved a step ahead. It is still looking for dull moves if it tries to move higher. Nifty closed just above 6000 marks but those are still not as impressive as people were thinking when we were hitting 6000 first time in last 2 years.

I still believe that we will see some little deeper correction. Pause is at 5965 is still acceptable. Market should try to settle for earning season also. One must note that we will have Infosys result and IIP number on Friday.

There is another important thing that one needs to note. Right now, almost all major global indices are looking for price correction. I am not saying for big price correction as money flow remains strong.  When one is talking about money flow then Indian market is perhaps most impressive. FIIs are still finding India as a market having better valuation.

If Indian market is not falling then it only the hope of rate cut in up coming monetary policy. Majority of rises are dominated by banking stocks. It is not doing overdone but it surely discounting the rate cut impact.

Conclusion Nifty: A bounce from 5965 is not entirely unexpected as it was given as support in my yesterday’s article. I am still considering this market for some more correction. Suppose if it kept on rising then it can generate target of 6082 levels. For today’s trading resistance will be at 6024 and 6042. In the downside it needs to break 5965 and try to test 5915 before rising or falling to change the trend.

S&P 500 – It was quoted for short from levels nearer to 1470. Right now (while compiling this article) S&P 500 is trading near to 1450. It is confirming that correction may continue. Technical charts are suggesting for last support at 1445-1440 levels. I am still suggesting standing on short side and keeping wider and flexible stop losses.  

Regards,

Praveen Kumar