06 February 2013: Nifty Elliott wave analysis: It took a pause near but 5940 but still there is no sign of strength. If it breaks 5940 then it may try to come near 5900. No positive global cues can help India trend.

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

For 06 February 2013: -

On 05 February 2013, FII bought INR 489.27 crs and DII sold INR 938.92 crs.

It is looking FII may try to reduce their intensity of buying. They used to buy INR 800-900 crs daily but yesterday picked only of INR 489 crs. We need to understand first that Indian market is refusing to accept all positive global cues. Even now when DOW JONES gained by 100 points, Japan trading 2.70% higher then also SGX nifty is trading on dull note. It is just gaining only 4-5 points.

Yesterday, Nifty slipped by 0.51% but Nifty midcap 50 slipped over 1%. I have repeated many times that this kind of activity generally happen near to the top and so it is happening. Our market is falling from past six trading days without any big reason. At some points it can spread panic in the market.  

VIX gains by 1.88% yesterday and giving signs of further fall. It was quoted that VIX will change its direction without braking 12. It hit a low at 12.57 and rebounded. Now it is at 14.61.

Hourly chart goes in oversold zone which might give us one intraday pullback. I need to strongly suggest that it is not a compulsion. It may happen or may not happen. If we can rise in over bought zone (happened many times) so why cannot it fall in over sold zone. If I am saying about recovery then I am looking towards global cues only which is strongly.

I have no reason to explain why Indian market is refusing to accept positive cues. It is showing that we have some wrong in a big way.

Pure technical suggest that if it is saving 5940 then it can try to rebound. It should try to come near to 6000 marks. I am again repeating, all recovery will be sold in coming days. Do try to conclude for bottom. ‘Negative divergence’ on prime indicator will give more pain. Fall of 150 points from top is just the beginning.  

Strategy for Nifty February future – I said yesterday that it needs to save 5960 if it wants to rebound. It hit a low at 5964 but not closed on any strong note. Well, I will still say as long as it is saving 5960-5950 support then we can see a rebound near 6000-6020 marks. Take a note that one rebound came yesterday but not sustained. My charts are saying that it will fail before 6020. Should I buy for bounce? I need to be clear that I will short and only short this market on rise and I am strongly betting on the test or break of 5900 too.

S&P 500 – This is moving beyond the best of my sense. It has recovered all its Monday’s loss. There is no sign of weakness. Whichever was coming for weakness has again saved. Take a note that as long as it is above 1490, we cannot bet for weakness. I can conclude that people are taking adventurous risk as they have easy money. I need to be honest, it is rising but I cannot say that it should raise more. It strongly deserves fall. It is not only USA which is on euphoric rise but Japan is also on the same way. When will these markets correct? Will they ever correct?

Is India a hot destination for global investors? Do not follow media based speculation. Technical charts are saying that Indian market were never the hot favorite. It was just an opportunistic pick. If FII are buying in cash then also they are making proper hedging in derivative.

Regards,

Praveen Kumar