10 April 2013: Nifty Elliott wave analysis: Every support can fail while every support will act. It is looking like to move towards 5450-5400 levels. Now, 5548 may act as stiff trading resistance. FII selling continues.

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

For 10 April 2013: -

On 09 April 2013, FII Sold INR 664.90 crs and DII bought INR 987.81 crs.

This is a bad beginning of a cycle. I have already expressed my doubt earlier also that FII may prefer exit from an underperforming market like India. It has started a week back and now intensifying. Well, no one can run away from what is going to happen. I was expecting a rebound. It came yesterday in first half but it immediately got sold at high.

I have already said yesterday that Nifty has a positive divergence of 60-70 points so it bounced for just 60-70 points and slipped. It has missed the critical 5610 marks to invite selling.

Rise failed to sustain even for an hour. This is itself showing the sentiment. I am concluding that Nifty has given up support of 5548. Now it is all set to open for next trading levels which can be near to 5400 or lower than that also.

What is the reason of this kind of selling? It may be hard to believe that derivative data showing that Indian market is not confident towards upcoming quarterly numbers. I am sensing that Nifty will face resistance at 5550 and 5610 marks. I have already warned from mid-cap stocks.

In past three trading sessions, I tried few long which worked well but Nifty never gave me any degree of comfort. I can say one thing; Indian market has missed the best possible levels for technical recovery. It is itself alarming.

Technical candle pattern – Bearish engulfing. It is double inside bar. It does not matter where it open but fall is very likely now.

Do you know that Indian market came at 7 month’s lowest levels? US market hit another life time high.

Strategy for Nifty April future – I am sensing that we should expect levels of 5450 now. In worse case selling it can hit 5400 also. On higher side it will have resistance at 5530 and then at 5560. One must note that most of the time selling comes once European markets open. Worse part is that it is taking only negative cues from global market. There is nothing much to add. This market is turning simple. Sell on every rise as no rise will sustain. Long trades have no meaning now.

S&P 500 – I was expecting a dead day before fall but it hit another trading high. Even European markets were off their day’s high. So as of now it should react with formation of double top. I still think that a dead day should come. One needs to note that 20 EMA support is now at 1555. It is also important to note that it has not yet closed below 20 EMA and this is a least prime condition to bet big on S&P 500. Is it coming? Yes, but when will it come that I do not know yet.

Regards,

Praveen Kumar