25 March 2013: Nifty Elliott wave analysis: A bounce deserves, it came but not sustaining. This trend will continue even for this week irrespective of global cues. Technical support at 5618, which is 200 DMA.

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

For 25 March 2013: -

On 22 March 2013, FII sold INR 14.20 crs and DII sold INR 135.57 crs.

We are on last week of this financial year. We have a short weak and derivative expiry too. Our market tried to bounce on Friday but give up in last few minutes of trade. Eventually, FII and DII both emerged as net seller.

Now, let us talk about Cyprus. Cyprus clinched a last-ditch deal with international lenders on Monday for a 10 billion euro ($13 billion) bailout that will shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians.

I have said this at the time of Greece deal also and repeating this time also. The way ECB is solving a problem it is itself opening door for the next problem. Have we ever passed even single quarter with a problem in euro zone? This union is the second name of headache. They will spend their life in solving this kind of crisis and bailout rather than achieving anything. It is designed to play with money. Richer will earn and poor people will trash out. I am strongly warning that this kind of steps can result as “mass anger bust” anytime in euro zone. Do not invite gentleman on the read.

Cyprus was an ‘experiment lab’ and very sooner you will hear about Spain and Italy.

Obvious question is about the impact on Indian market. A gap up is a very simple expectation but Indian market may give up from higher levels again the way it did on Friday also. I was expecting about but worse part is that those bounce get sold on intraday trade itself. I am expecting at least one bounce from near to 200 DMA which is now at 5618 before finally breaking this. I am not very optimistic after gap up.

There are many stocks in Indian market where media people are trying to convince you to buy. Recent example was RCOM. Do not enter in such trap. Mid cap and small cap fall is far away from over. This is alarming phase of Indian market where index is not doing the damage like market.

Strategy for Nifty March future – I have already expressed my views for recovery on Friday during my ‘intraday updates’.  At least one bounce deserve from current levels. Nifty March Future is looking like to open at 5690. Technical charts are suggesting for a move towards 5726 once it stand above 5692. I am not very sure that it can be possible without short covering. My strategy will be to trade long but I need a chance to buy at low. Will I get after gap up? Strongest bear of the world is in India itself.

S&P 500 – It is still at high and making one day up-next day down structure. You do not need to look at indices future right now after Cyprus deal. US markets were already sensing it coming. All technical indicators are saying for something to go wrong at current levels. It has formed a range of 1538 to 1558 (~1564). Rising VIX is showing that now fear is rising. I can still say that it is just a matter of time for this fear to convert in to selling. It is very tough to say about exact time but a big disappointing fall coming.

Regards,

Praveen Kumar