02 April 2013: Nifty Elliott wave analysis: It has just missed my mentioned resistance of 5735. Now, expect a swing towards 5640-5600 levels. It may be oscillating forth wave.

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

For 02 April 2013: -

On 01 April 2013, FII bought INR 313.07 crs and DII sold INR 269.16 crs.

I was expecting choppy trading with stiff resistance at 5735. We got a trading high at 5721 and then it slipped. I was expecting this movement.

First of all, we need to note that sentiments in Indian market are much weaker compared to any other global indices. This is the prime reason that recovery is coming with so many doubts. I feel that failure of 5735 will be the beginning of choppy movement in the zone of 5600 to 5735 levels on approximate basis.

Last night, Even US market got some disappointing manufacturing data and hence slipped form higher levels. Moreover US Small Cap 2000 index has seen selling of nearly 1.50%. This is the key. Remember, weakness in small cap index can be the beginning for correction in blue chip index. Investor’s sentiments generally first hit on small cap stocks. So, it is looking like time has to finally say ‘sell’ to USA too. One must note another thing too that European market is already under correction from mid-March month itself.

My technical charts are hinting for fall towards 5650 to 5600 levels. It seems that we are on weekly higher on Monday itself. I am strongly suggesting that people should try to maintain distance from beaten down stocks especially mid cap stocks. Fall is not over yet and it will continue for little longer.

Suppose, even if it move above 5735 then also we will have continuous resistance till 5800. In the down side, we can get easy slide. I am saying that we are on forth wave which is generally choppy if wave two is rapid. We have rapid wave two and hence I am expecting choppy forth wave but this is not a compulsion.

Over all, what I am expecting is that Nifty will move in the zone of 5600 to 5750 without breaking any side for direction. I will be happy if it breaks lower. What can be reason for that lower break? Definitely, we need fall in US market first. After seeing small cap index, I am convinced that it is coming.  

Strategy for Nifty April future – It came little above 5735 but never sustained and result came as a fall. I feel that Nifty’s change in composition was also a factor. Technical charts are suggesting for a move towards 5670 and then 5640 levels. Now, suppose if it opens below 5700 and remains below that levels then we can expect a good dip. I say, short blue chip indices again as higher levels are failing.

S&P 500 – US small cap 2000 index has seen a fall over 1.50% and this is the opening for bears. S&P 500 has also slipped from newer higher levels. Technical charts are suggesting that it is matter of time to break 1545-1540 levels. Once it slips below 1540 then prepare for big. On higher side it is failing above 1570. I must say that it will be most awaited correction in US market. We have never seen this kind of resilience in US market in recent multiple year. I want trades to begin below 1545-1540 levels to bet big.

Regards,

Praveen Kumar