09 April 2013: Nifty Elliott wave analysis: Nifty support is emerging near 5548 – 5534 zone. Technical ‘positive divergence’ can give a bounce but no bounce will sustain in coming days. Dovish sentiment will limit recovery.

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

For 09 April 2013: -

On 08 April 2013, FII Sold INR 163.95 crs and DII bought INR 212.72 crs.

One must focus on FII flow pattern. It was 5^th straight day of selling. Is it not ridiculous that FIIs are selling when market already came lower? Well, they have done lots of hedging too. I do not give much importance to this but we need to accept that cycle is changing. I doubt that big money will not come sooner to Indian market as it has turned to underperforming market.

Now, market man should focus on earning season. It is not only true for Indian market but also for USA market too. Will that act as trigger for selling in USA market? God knows.  

Indian market is not doing anything great from past two trading sessions. I have already discussed about the ‘formation of possible positive divergence’ on daily as well as hourly chart but it is not giving any result. This divergence got a length of nearly 70-74 points. Derivative data suggests that put-call ratio is near at 0.80.

I have no great expectation but I will prefer to keep my bias on positive side. I have one condition – it must stand above 5534. If it breaks 5534 then it will slip towards 5500-5480. Positive divergence should play its role but when.

I cannot yet say that I am getting a trigger to buy. I have already few days back that break below 5548 will not give easy recovery. I may prefer to pick opportunity in stocks only.

Strategy for Nifty April future – Strong support for Nifty future will be at 5550. If it breaks then it can give up to 5524 – 5503 levels. I am expecting a rebound but a trigger is missing. One must note that even for divergence we need trigger. I am sure that no rebound is going to sustain but it deserve a rebound. I am cautiously optimistic as long as 5550 hold. If it breaks then I will not touch Index. I am not confident but I am expecting rebound near 5600 levels.

S&P 500 – Again, a rebound from Friday’s shock. I was sensing this to come so I said yesterday that it may try to hold for 1-2 days. Now it came to the levels I was expecting. Yesterday’s rise came with small volume. Expect a dead day today and then fall will begin. You can conclude that this rise came to form a lower top. Note another important point – we need close below 20 EMA to bet something big.

Regards,

Praveen Kumar