25 January 2013: Nifty Elliott wave analysis: Eye opener fall begins on mid cap indices as expected. By any chance, if Nifty goes below 5995 then expect massive selling (likely) !!!

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

Today’s outlook: -

On 24 January 2013, FII bought INR 1026.32 crs and DII sold INR 752.26 crs.

Are you still focusing on the figure that FII are buying? If yes, then feel that pain of fall in stocks like HDIL, IVRCL INFRA and even HUL and TATAMOTORS. After crossing 6000 marks, we spend 17 trading sessions but we are still at 6000. I have already indicated for “the topping” formation in this zone.

It is market dynamics that give us price correction and it was bound to come. I have already said that MACD and RSI are giving ‘negative divergence’ which cannot be ignored to a bigger time period. I will still say, save your self from burning mid cap stocks. Promoter’s game is not over yet and asks SEBI why this happening is in a periodic manner.

It is technical which are giving indications in advance and it is up to you if you re accepting or you are rejecting because of temporary failures. I was expecting that first top should come from US market but it is looking like Indian market might have formed first top.

If you are a trader then also you need to give the test of patience. Even shorting in this market may not reward you in small time frame. First weakness has emerged on metal stocks from higher levels. if you look at the money flow pattern then you can able to see that HUL and TATA MOTORS were FII favourite and both got multiple up gradation. Now both slipped drastically. I am leaving conclusion on you to understand. Who was right?

Strategy for Nifty January future: I have spotted 6111 for January month future and it has failed to give us a fall which is almost 100 points now. Even yesterday it was written for 6010 to 6000. It hit 6010 before moving higher. We have seen second half fall. For today, keep an eye on 6000 marks. Trade below 6000 for 5-10 minutes will give 5950. On higher side 6080 will be tougher resistance too cross.  

S&P 500 – 1504, a high on S&P 500 came yesterday to hit highest levels since September 2007. I kept on saying buy from 1345 and even at 1400. I turn bearish saying that rise till 1500 is possible but those are shorts only. Remember the fear gauge VIX is at all time low. This index must see correction. First sing of weakness will come below 1475 which is now too far.  

Regards,

Praveen Kumar