14 January 2013: Nifty Elliott wave analysis: It came on dot at 5940. Nifty is not looking stable above 6000 marks. Consolidation can drag market towards 5915 to 5900. Break below 5900 will be decisive.

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

Today’s outlook: -

Even excellent numbers by Infosys failed to boost blue chip index and Nifty closed with marginal fall. Today is another important day on data and result front. We will get TCS and inflation numbers today. It does not matter what is happening on fundamental front but on technical side Nifty hits 5940 levels.

Technical charts are giving a hint that if it sustain below 5940 then we will the levels of 5915 to 5900. This would be 61.80% of whole third wave on hourly chart. We need to understand that Indian indices have traded with weakness while rest of the world indices is trading with stable mode.

From last many weeks I am mentioning about MACD negative divergence and VIX movement.

You can watch the trend line. It is breaking on lower side. It is more like a wedge pattern which is breaking on lower side. As it failing at higher levels so we can conclude in coming days that perhaps we have already formed a short term top. I have already stated that market would have a top at second week of January and we have almost formed that.

We need to see the development of 20 EMA (Exponential moving average). Nifty has respected that from long time. It is on the verge of break. We can see lots of volatility near or below this level.

On 11 January 2013, FII bought INR 825.17 crs and DII sold INR 516.07 crs.

World indices are not looking as tired as Indian market. Our market has betted rate cut in upcoming monetary policy review and this factors can cause a bounce from lower levels in coming days.

Till Friday, there were so big talk about fuel price hike but now once again we are getting silence.

Conclusion Nifty: Nifty I failing at higher levels for third day in a row. Technical charts are suggesting for the fall if it breaks 5940 levels. If trades sustain below 5940 then it will generate intraday fall towards 5915 to 5900. It was quoted earlier also that 5900 levels would play important role. On higher side it will have resistance at 5980 to 6000 marks. I still believe that nifty will take once bounce after a dip but it cannot conclude the levels yet.    

S&P 500 – I am already feeling that at 1470, it is better to be silent. Charts are saying to buy above 1470 but one need to note that market forms a top where number of bulls goes highest. Technical charts are saying that we may not see any great advance above 1475, just what is happening with Nifty. I strongly, “Short on every rise”. We may see 1500 also but all those levels will be for SHORT & SHORT only.

Regards,

Praveen Kumar