06 March 2013: Nifty Elliott wave analysis: Dow Jones on new all-time high. Will it give boost to Indian market? Look for follow up of buying, resistance is at 5834.

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

For 06 March 2013: -

On 05 March 2013, FII bought INR 220.79 crs and DII sold INR 244.80 crs.

A bounce came in Nifty on the hope for newer high on Dow Jones. Well, all came. Indian market was in over sold zone. Nifty has a recent trading low at 5663 and as per chart it is looking like to hit 5834 levels. It is 38.20% of all fall that we have seen from 52 week high.

We must remember that Indian market is already under performing the world. With just one day of rise, do not bet that mood is changing. I always say that follow of trades are very important when we experience for any great reversal. So, will market manage to get a follow up of rise?

Once nifty has crossed 5740, it was giving signals for recovery but equally this strength will give up its intensity near 5834 levels. We need to remember that we have n-line resistance even at 5823 levels. Market may try to give some gap up opening, say10-15 points. That will give us 5800 in opening minutes itself. So after opening we may not have great range to trade for long. Still market is looking to support recovery. From 5800 to 5834 may not be small to deal.

India VIX is now at 13.39 levels. One must watch, if bounce comes in VIX then it can give lead alarm for fall. I like to remind again that do not try to target any mid cap, small cap stock as more fall will come in Indian market in this month too. I am saying this for all such mid cap which lost more than 20-50% in past few days.

Strategy for Nifty March future – I concluded that 5800 should be a decisive and stiff resistance. Definitely, I was not expecting this to come by yesterday only. One sharp bounce may change many things. It is looking more aggressive. Once it is standing above 5800 then it is opening room for another 50 points of range of rise. If market has to give for recovery then it will not able to cross above 5853 levels. Banking and short covering will be key for bulls. I am not short on Nifty future now but willing to short at high again.

S&P 500 – Finally, traders got what they were wanting. Dow came at new all-time high for trading and closing both. I am not convinced with rise, does not matter how much rise is coming. As long as it is above 1513 levels, I am not sure that it can be good to hope for fall. Still I will say, if fall/correction/profit taking has to come then it must come now. High risk/reward ratio should trigger some profit taking. Worse day may come after best day.