03 April 2013: Nifty Elliott wave analysis: Nifty looks stronger but it should go on side wise direction now with resistance at 5775-5791 levels. Global market remains firm to limit any possibility of another big correction.

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

For 03 April 2013: -

On 02 April 2013, FII Sold INR 45.41 crs and DII bought INR 205.80 crs.

Last day was good for Indian market as Nifty has crossed its critical point of 5735. Technical charts are giving next important point at 5775 levels (Why? Please refer to the given chart). Somehow I am feeling that Indian market is lagging its global counterparts again.

We have seen small cap and mid cap indices has traded with gain of more than 2% yesterday. It is not good to be fashionable long. Traders must prefer to avoid small cap and mid cap indices. It is true that small – mid cap indices give lead signal for blue chip index but it has failed in March month of trades.

I am not shorting this market but equally just sticking to strong point of buy. I am not getting overwhelming long signal to jump.

I like to highlight event which has happened yesterday and unnoticed. Government deferred ‘sugar decontrol’ again. Government is unnecessarily giving chance to be speculative on sugar stocks. Is it fair or unfair? I am leaving on you to decide. It is again referring to ‘weak policy making’ and lesser desire to improve economy.

In another market development, we came to know about the deal between RIL and RCOM. Well, this is perhaps the first good step that both brothers have taken in past 7-8 years. More important is that Reliance might have found its way to use its cash reserve. In my view, it will be Reliance who will get better benefit of this deal.

Technical charts are still suggesting for sidewise direction and some excuse will emerge. Right now, SGX Nifty is down by 14 -15 points. I have two important resistances. One is at 5775 and another at 5791 levels. Expect good technical support at 5700 levels.

I have already quoted yesterday that broader range should be 5735~5750 to 5640~5600. Note that it is 4^th wave and it can be choppy.

Strategy for Nifty April future – I feel that it was driven by short covering yesterday. I never prefer to stand short if put – call ratio comes near 0.70. If you look at the pattern of rise then you can sense that major moves were driven by short covering only. SGX Nifty is trading with softness so it may surprise bulls from current levels. I am free to digest trading direction. I do not think that I have too many reasons to buy stocks. Avoid long on gap down. Important trading support is at 5710-5690.

S&P 500 – USA become very frustrating part of the world now. S&P 500 has gained 0.50% and Down Jones gained over 0.60% last night. Well, but US small cap 2000 lost 0.50%. I am still considering that 1570 levels might result the top. What can be top? Figure can be 1 5 7 X. We still have unknown ‘X’. Let us see today. I hope that weakness of small cap 2000 will be the lead signal for next trend.  

Regards,

Praveen Kumar