18 March 2013: Nifty Elliott wave analysis: Nifty closed below 5890 and I heard about Cyprus bail out as new Euro zone crisis. Expect a fresh wave of sell off. Firstly will hit 5790 and then it will take a move towards 5548.

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

For 18 March 2013: -

On 15 March 2013, FII bought INR 1018.93 crs and DII sold INR 584.48 crs.

Multiple times I said in the last week that uses this rise as opportunity to exit and shorting. I have almost utilized every single opportunity. We have 5800-5900 Nifty future as well as multiple stock futures. It is not all, I have added aggressive S&P 500 Future at 1562 to 1560 and betted that US market will see its final top on 15^th March 2013.

It is Monday morning and I heard about the impact of fresh euro zone crisis. Dow Future lost 130 points and SGX Nifty lost 40 odd points. I have already given too many things to explain technical chart using Elliott waves, RSI and VIX.

Right now, we will see critical resistances at 5900 (~5890) and 5940. I have spotted 5940 as resistance on Friday too, we have seen high at 5945. I feel that equity situation will be worse from bad in coming days for every single day of the week.

If you have any hope from RBI then it will also not help. Look at what has happened last time, on 29 RBI gave repo rate cut and we finished a top. Where were the rallies of rate cut? We have WPI at 6.84 % and CPI at 10.91 %, its too big spread to afford. RBI may give rate cut or may not give rate cut but charts are saying that reactions might not be as good as market is expecting.

Look at VIX again for today. Keep your eye on 17-18 levels. Cross over will generate huge shoot up.

What I key of Cyprus bailout? Well, one condition of bailout is that big depositors (whose deposit is higher than 1 lakh euro) have to pay a part of bailout. This is non-sense and do expect more non-sense from Euro zone.

Strategy for Nifty March future – I have already given enough hints about the weakness. If you have added shorts and forwarded with overnight risk then you can enjoy 40 points gap down as reflecting on SGX Nifty. So, I am starting my analysis from 5860. A break below 5850 will give simple support only at 5800-5790. I am not expecting any great recovery, today might be the day where recovery will not come. Expect trading resistance at 5875 to 590.

S&P 500 – S&P 500 Future is already down by 20 points. I have finally added short on Friday’s trading in the range of 1563 to 1560 in April Future betted that US market will hit its final top on Friday night. I can tell you that break below 1535 will be confirmation of top. I am 90% convinced that we hit the top on US market. Break below 1535 will end up 1485. Cheers for bears !!!

Regards,

Praveen Kumar