12 February 2013: Nifty Elliott wave analysis: It has another pause near 5880 levels but still there is no sign of any technical recovery. We need global sell off to bet for further remarkable fall. Is it coming sooner?

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

For 12 February 2013: -

On 11 February 2013, FII bought INR 995.83 crs and DII sold INR 940.90 crs.

Shall we cheer about this money flow or shall we worry about this kind of money flow? Even after such heavy money flow, Indian market is drifting lower. Global markets are still trading on firm note. We got more than 210 points of selling on Nifty and yet not giving even a single sign of recovery.  

Shall I try to find out technical support for recovery? No, I am not trying to do that. Every support can fail to give support before acting on final one. I want to see revival on technical indicators first then I will try to find support. Unfortunately, technical indicators are not giving any sign of revival but true those are entering in over sold zone.

Is it sufficient to think about recovery? No, entering in oversold zone cannot be only criteria. We need to see strength in those. Indian market is in 11^th trading session today after hitting a fresh 52 week high at 6111.80. Core of the study is that we may expect more weakness before we see any recovery.

If you look at intraday trading pattern then you can understand that we are getting 25-30 points of technical recovery everyday but all got sold. I can sense only a consolidation but substantial recovery may not come. I am still feeling that we are temporarily out of zone to buy stocks. So, one should try to make exit from long position if one have.

Do remember, I said many times in whole January month that market is forming top above 6000. Hope you would have make exit from your long deals much earlier.

Market is going to focus its eye on upcoming IIP data which will be presented today. You can expect this data coming at 1%.

Strategy for Nifty February future – It was a narrower trading band and we have experienced fluctuating premium. It was definitely expected. Well, it has never broken 5900 yet. I am still suggesting that one need to focus on 5900 levels. If it breaks and sustain then you can expect fall towards 5850 levels. On higher side 5950 to 5960 levels. I said that we need to see global correction to bet for further fall. Remember that Indian market is looking perhaps weakest in the world. Even a small global drift can easily give some hurt to our market. Use higher levels or recovery to build short position.  

S&P 500 – Wall Street goes mad with this kind of rise. We have seen a pause last night. A pause is not sufficient to conclude for profit taking. I am still considering it for profit taking/ weakness to come. Narrow trading band after wild movement above 1500 is making a puzzle. Charts are demanding for technical correction. Threshold for fall is coming higher. Now it seems that even the break 1505 will result a move towards 1495 and then steep fall cannot ruled out. Technical resistance will be at 1520.

Regards,

Praveen Kumar