21 January 2013: Nifty Elliott wave analysis: Nifty make another dot hit on well informed resistance at 6084. Only the cross over of 6084 will give us 6100 to 6126. Expect support at 6024, we might be running near top.

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

Today’s outlook: -

On 16 January 2013, FII bought INR 1169.65 crs and DII sold INR 961.67 crs.

Nifty hit my informed resistance at 6084. We got Reliance result after market which is impressive enough to open with 5% gap up. Somehow it may not able to give much impact on indices. Technical charts are suggesting that trend it still up with sluggishness. Immediate trading support will emerge at 6024 in any intraday fall.

I still believe that we may move higher towards 6100 or 6126 but these might be for top. I am not trying to put a nail on top as it is a dangerous task. I have already said this in past also that as long as we are above 20 days exponential moving average we are safe for short term. As of Friday’s close 20 EMA is at 5974 levels.

One can refer to my weekly wave analysis of Nifty to understand the VIX. It has closed in green on a week where market was rising. This is definitely not a good sign for market. I am unable to conclude the time frame but it can make its impact very soon, in a week or two that depends on market mood.

One need to note that now mid cap and small cap indices are underperforming Nifty.

If you look at the hourly chart, we can experience the intraday toughness. Where are the days when we were getting trading movement of 40-40 points in a day? Practical trading range need to improve but it is still narrow from month of December 2012 itself.

For today, I have a hope from Reliance whose GDR has gained over 5% in Landon Stock Exchange.

Strategy for Nifty January future: It came near too 6096 but unable to cross. It may try to move another attempt. Failure of 6-96 to 6100 will give another intraday dip of 20-25 points. This might be the impact of Reliance. As long as it is above 6050 for intraday basis, there can be the possibility of bounce back. Break below 6050 will drag it towards 6018 to 6000 marks. Nothing is impossible. Successful cross over of 6100 can invite short covering but those depend on extent of rise on Reliance only.           

S&P 500 – It has some high at 2007. VIX is running below those 2007 levels. When investors turn so fearless, I start fearing. I am expecting the dip to come very soon and my first logical target is at 1445. I do not know the reason of fall. I am already saying that anything above 1475 is for short and short only. Till now, I am wrong and it seems that I have initiated short in hurry but I am firm on my decision. Definitely I am not trying to be over confident as there are genuine sign for fall..  

Regards,

Praveen Kumar