22 January 2013: Nifty Elliott wave analysis: Nifty is on dull and tired rise but still on upward trajectory. Wave reversal support is at 5985 (20 EMA). Top must form firstly on US market not any other.

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

Today’s outlook: -

On 21 January 2013, FII bought INR 842.96 crs and DII sold INR 890.17 crs.

Nifty is still running higher. It does not matter if it is dull or tired. Simple charting structure suggests that when we are not even closing negative then we cannot say about immediate weakness although we are near another crucial resistance of 6100.

I have already said that cross of 6068 may able to give 6084 to 6100 marks. We are now near to 6100. Remember, cross of 6100 will result a move towards 6126 levels. We have most crucial trading and short term support at 20 EMA. It is also rising sharply. 20 EMA is now at 5985 levels, still almost 100 points away.

We may see intraday dull moves but most such movement is getting a follow up by impulsive rise in second half. Money flow remains robust from FII side. It is looking like market is not wanting price correction but this kind of assumption is not good for rise. Corporate results are better than what I was expecting. There are no negative surprises in any big ways.

I still believe that we are running for top formation but we are not on exact top. Before getting a top we may have some indications from other factors too. Like, mid cap and small cap indices will start under performing. You can sense that it is already starting. Market may try to catch some threshold.

Based on wave theory, we are on fifth wave progression. Now, there is a big problem in this fifth wave. It is running with negative divergence on crucial technical indicators like MACD and RSI.

Perhaps, it is defining those sudden impulses which we are getting during trading hours now a day.

Strategy for Nifty January future: I need to state that premium fluctuation is beyond the scope of explanation. Yesterday, sometime it was having premium of 6 points and sometime running with 21 points premium. It is very tough to save trades from this kind of premium. Technical charts are suggesting for support at 6060. You can expect the test of 6060 unless we stand tall above 6111. Split trading movement in two parts, one pre 2 pm and other post 2 pm.

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