15 January 2013: Nifty Elliott wave analysis: Nifty closed on multi-month high backed by booster dose over GAAR. I still suggest that it should be the short term top no matter how many bulls are there.

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

Today’s outlook: -

On 14 January 2013, FII bought INR 611.10 crs and DII sold INR 1210.55 crs.

Few days back I said that this market is rising only if it gets a booster dose of some good news. With the beginning of the month we got a trigger from US market on solution over fiscal cliff. Now all of a sudden it comes GAAR this time. It has learnt that it is going to be implemented from year 2016. I say, a great policy making. It is just showing the confusion and the benefit goes to bulls. A rising market can ignore anything. No one is concerned about economy but everyone is concerned about stock price.

Technically, it does not matter how but it has closed at 6024 levels which are sending some good news to bulls. I am saying from past few days that we are perhaps near to short term top. I still stick with it. Even if rise comes it can be 1-2% only. It cannot change many things. Another thing is that the numbers of bullish people are very obviously going to be higher near to the top.

Charting has no concerned structure but surely it may not remain same. As of now, it has saved at 20 EMA and bounced. I need to be equally clear that technical indicators are not as troubling as of Friday.

My prime reason to be susceptive is divergence formation on few important technical indicators. We may not see decisive fall now but things are not even looking good for buy. I have a view that we are moving towards last stage of so called ‘reforms; Technical charts has a structure which is suggesting for 6080-6084 as target on the cross above 6042.

Yesterday, we have better WPI numbers and a bad CPI numbers. Market is largely betting on rate cut and rise is dominated by those reasons too.

Conclusion Nifty: It rebound on the day when I was least expecting this kind of bounce but it was purely based on news and related short covering. Things remain unchanged for me except few technical levels. It has closed at 6024and it is generating potential to move towards 6080-6084 levels. Immediate technical support will emerge at 6000 marks.      

S&P 500 – I strongly say, “Short on every rise”. We may see 1500 also but all those levels will be for SHORT & SHORT only. Till now 1475 remains untested and it is trading at 1467 (when I am compiling this article). Is S&P 500 making second top which is lower than 1475? If yes then it first bad news for bulls.

Regards,

Praveen Kumar