16 January 2013: Nifty Elliott wave analysis: More steam left on Nifty and it may try to achieve the levels of 6084 or higher. Immediate trading support will be at 6024. It is topping formation but not a exact top yet.

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

Today’s outlook: -

On 15 January 2013, FII bought INR 1077.55 crs and DII sold INR 755.84 crs.

FII can put as much money as much they want and it is looking endless right now. Nifty is breaking every single technical barrier with ease. We are near to the top but not on top yet. One must note that in a market which kept on hitting newer high, it is not possible to say that any particular levels will be a top or will form a top.

We will have immediate trading support at 6024 levels. We need to see some formation to develop at higher levels to bet for any remarkable weakness. As of now I can say that 20 days exponential moving average is one such level. It is still below 6000 marks of Nifty.

Practical trading suggests that we need to rely more on charting formation than moving average cross over or break down. Many technical indicators have entered in over bought zone. Many global markets are trading on mutli-month high.  

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. A technical chart has a structure which is suggesting for 6080-6084 as target on the cross above 6042.

I need to say that cross over will generate the target of 6126 on Nifty spot. We have seen some silence to profit taking in European market. I am expecting profit taking to come in Asian indices today. Can I say same thing for Nifty? Opps !!! No, not yet. Market is still assuming that we will get a rate cut in this month. “Optimism” is a key driver above 6000 of Nifty. The person who is going to take a decision is still silent. Corporate earning is looking good so far but many stocks has already seen very sharp rise in past three months.

Conclusion Nifty: We can conclude that up trend will continue and Nifty may try to move towards 6084 levels. It will have trading support at 6024.Wecan expect profit taking only if it sustain below 6024 for 5-10 minutes. Do note that nifty future will give lots of trouble due to heavy fluctuation in premium. I am taking a key that I will buy only a positive market. I will not prefer to conclude for buy in dip kind of strategy from higher levels.        

S&P 500 – I said, “Short on every rise. We may see 1500 also but all those levels will be for SHORT & SHORT only.” Till now it is turning shy at 1475 levels. I cannot say when it will see a dip but many momentum indicators are turning sluggish. It is a zone where one needs to spread short. Correction will be technical in nature. There are few concerns over debt ceiling but those has no great impact yet.

Regards,

Praveen Kumar