10 January 2013: Nifty Elliott wave analysis: Nifty has failed again above 6000 marks. This level is disappointing bulls too. Applicable resistance is still at 6024 and 6042 only. Will it hit 5940 or 5915?

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

Today’s outlook: -

It was mentioned yesterday that fall has not done yet. It is still too early to conclude anything but there are chances that have got ‘short term top’ at 6042. I am sensing that Nifty can come to 5915 levels before rebounding again. I have already said that break below 5980 should give 5965 first and then further fall should come. This pullback can bring Nifty down to 5915 levels.

My given charts are already explaining the things. We need to note two important things which were mentioned earlier too.

1. We have MACD negative divergence on daily chart which was suggesting that rise can be limited. This is what I concluded when we were trading near to 5900.
2. VIX was also hinting the same things. I am not aware what is going to change in coming days but you can get a Shock on VIX before getting any bigger cut in the market. Do you know that VIX hit a low when Nifty was not making high of this week. Fear guage will be in action in coming days.

Now we have a close below 5980 levels. Closing basis it is very important to watch the follow up of trades. There is another thing which is coming from policy making front.

Government of India has already segregated petrol, LPG and diesel price hike from Union budget. By hiking railway fares it has segregated it from rail budget. So, now do not hope anything from ‘Budget session’. Government might try to play for votes. Is this market is wanting? May be not, but I am presenting you the views.

There is another important factor which market is counting. It is hoping for rate cut in upcoming monetary policy but it is looking like that it is discounting even those. I still believe that there is nothing wrong yet on banking charts. Those are still looking firm for more rises.

I will say, market might be strong but running short of ammunition.

Conclusion Nifty: Nifty has failed at higher levels and close below 5980 marks. I have already said and repeating now that more fall should come. This market can test your patience during trading hours. If not yours then it is testing my patience at least. I am expecting Nifty to come towards 5915 to 5900 levels. On higher levels it will have massive resistance at 6024 and then at 6042. Look at even yesterday’s high.   

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. No change in study as market is flat in my views.

Regards,

Praveen Kumar