04 February 2013: Nifty Elliott wave analysis: I say that chart has broken the support for a fall. Can the move above 14k for Down Jones able to change the technical weakness? May be not! Expect stiff resistance @ 6024 and 6050.

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

Today’s outlook: -

On 01 February 2013, FII bought INR 763.28 crs and DII sold INR 1088.62 crs.

We got closing below 6000 marks with some panic kind of feeling. Sores is that it came when whole global were enjoying the gain. Even Dow Jones has surpassed 14000 marks. Can it bring a recovery? I can say that even if it comes then also it will get sold at higher levels.

I am already mentioning from long time that Indian market has strong negative divergence on the chart. This divergence is on MACD and RSI both. This has given a ‘topping formation’ it took the rough range of 100 points above 6000 marks to consolidate. We have seen a consolidation of a month.

It is also important to note that after 26^th November 2012, it has closed first time below 20 EMA (days exponential moving average).

For today’s session we need a break below 5980 to see further possible 40 points fall. I am expecting the test or break of 5940 right now. Unfortunately, bears are not getting good supports from global market and from news flows too.

This is now a very highly overbought level for many global indices. I strongly believe that expecting ‘correction’ is not a crime. It should come and it must come. I can sense for a parallel fall in Indian market. So, are we heading for worse February month? We will get some answer today if it manages to close in red. Green closing will again raise the question mark on rise.

Strategy for Nifty February future – It was 50 points dip from intraday high point. We will see trading resistance at 6080. We need just 5-10 minutes below 6020 to bet for a move towards 5980 levels. So, I believe that we will have a room to correct further by 40-50 points. If anything is disturbing then it is just Dow Jones which moved above 14000 marks and closed successfully. It is not giving any signs of profit taking even in massively over bought zone. I believe for global correction for this week but no such strong reasons are coming yet. If something comes then we can enjoy trading else same old dead market.

S&P 500 – I said for this week – it will be get-set-go for fall. We got mammoth closing on Friday. I am little nervous but I still believes that we will see fall in US market. It is giving some sense that correction may not extend above 14170 marks in any ways but that is also 1% far from here. I desperately need close below 1495-1490 to feel some comfort. I have published some charts on weekly study so traders can check nby clocking weekly links. I like to see today’s close to conclude.

Regards,

Praveen Kumar