13 March 2013: Nifty Elliott wave analysis: Look for reversal support at 5890. Break will give levels towards 5850> 5823 > 5800. Valid resistance will remain at 5971. Do not buy fall!!!

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

For 13 March 2013: -

On 12 March 2013, FII bought INR 733.25 crs and DII sold INR 877.38 crs.

I have suspected the fall which came yesterday and it came in its own wild style. We have seen massive volatility in last 90 minutes of trading. Failure above 5971 is giving sell signal for the first target towards 5890. It did in two trading sessions and came at 5893 yesterday.

Now, we are on 8^th day from the recent low of 5663. One must prefer to watch for the reaction at 5890 levels. Once it breaks 5890 then we can hope for a move towards 5835 to 5800 levels.

This market is again hoping for rate cut in up-coming monetary policy review. In fact, market is already discounting 25 bps repo rate cut. Yesterday, we got IIP data at 2.40% and CPI data at 10.91. These numbers are reducing the hope of rate cut. Do, you know that Indian CPI data is second highest amongst remarkable economies.

World market came for pause but not for fall yet. Indian market has a history of fall whenever world market goes for pause in past more than a month. Dow Jones closed positive again for the eighth day in a row. European markets are still concern about Italy but bond buying program remains unaffected.

One must note that VIX has seen rise of 6% yesterday and closed at 15.37, this is alarming factor for the market.

My view is that as long as it is staying below 5971 we cannot see any remarkable rise. Once it breaks 5890 then we can hope for further 60-90 points of fall.

Strategy for Nifty March future – I have quoted 5910 as support and it has tested 5916 as a low. I am more interested to see it breaking below 5910. Once it breaks 5910 then we can see movement towards 5850. Somehow it is showing that market momentum is again changing. One must note that remarkable resistance will be only at 5990 levels. It is looking like to see a big fall in coming few days again, same as February month series. Yesterday, 5400 put shoot up by 105%. Something is troubling bulls.

S&P 500 – It has a high at 1556.77 yesterday. It has seen some profit taking. When it is at 1556, one can name it as top for selling and one can be right but that can never be good idea. This top or any top can be confirmed only if it manages to close below 1538 levels. I am expecting this to happen sooner but there is no such real sign. I am advising to watch US SPX VIX closely. It will give us first indication for bigger and bigger fall. Let it move above 14 to play for big bet, it may come sooner than what you can expect.  

Regards,

Praveen Kumar