18 February 2013: Nifty Elliott wave analysis: 100 SMA support is now coming at 5830 which is colliding with technical support at 5823. Break below these supports will crack FIIs too. Fall will continue even if bounce comes.

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

For 18 February 2013: -

On 15 February 2013, FII bought INR 247.30 crs and DII sold INR 245.98 crs.

Nifty hit a 5854 and then it has seen weekend short covering. It gave a last hour rush but closed in negative. This kind of impulse might be coming as Nifty is moving close to 100 SMA. If you remember same things were happening near 20 EMA support.

Technical charts are saying that we are entering in oversold zone. Remember that market can rise in over bought zone and fall in over sold zone. Well, but we are not in those kind of oversold zone yet which makes the recovery a compulsion.

I still believe that any weakness in global market can make situation in India more troublesome. I marked Nifty movement from 01 December 2012 with some line movement. It is giving me a sense that it may try to for H&S pattern. Definitely, it is not a text book 100% H&S yet but it is enough to suggest that one has to be very careful if it breaks 5823 marks. Take a note that even if fall comes then it will not be straight line fall.

One can sense a small positive divergence on daily RSI on lows. This is something which can give rise (again, it is not so strong to make a compulsion). On higher side it can come to the levels of 5920 and then at 5940 levels.

I am sure that trading range will not be as big I am expecting so it needs some time to give all colors of trading and analysis. I have just one strong set of words, “No recovery will sustain and get sold every higher level”.

Strategy for Nifty February future – Once it has broken 5900 I was expecting 5850 > 5820 levels. It has mild technical support at 5850 but this is less technical and more psychological support. Technical charts are suggesting that this market will touch 5830 – 5823 zone sooner or later. Take a note that Nifty spot 100 SMA is at 5830 levels. I am assuming for technical resistance at 5900-5910. Even if it crosses then also it can turn dull at 5940 levels. Break below 5830-5823 will create panic. Yes, a panic selling can hit this market. Remember, till now I was saying sell on the rise but now if panic comes then it will be sell on low too.   

S&P 500 – It is patience testing deal now. This is something which is happening perhaps first time in multiple years. US indices were no such history. 20 EMA is now at 1503. I will again say that keep an eye on 1508 to bet for fall. Above 1500, firstly it has broad the ranges for trading and now narrowing. I am still puzzled. What will begin fall and how? Everything that goes higher has to come under gravity. Let us see. Every night I am hoping for fall but my waiting is turning longer.

Regards,

Praveen Kumar