16 April 2013: Nifty Elliott wave analysis: We saw an up day but again with failure of 5610 then US market tumble last night. Expect gap down for a move towards 5500 < 5447. If not stop then even 5400 too.

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

For 16 April 2013: -

On 15 April 2013, FII sold INR 418.37 crs and DII sold INR 297.18 crs.

I am already saying this from past few days that FIIs are losing hope and they may prefer to take big exit. Yesterday’s sell figure in cash market is biggest for single day in recent few months. Remember, this came when Nifty closed with a gain of 40 points.

I am not giving much importance to yesterday’s recovery as it came due to excessive shorting and less trigger for further selling. Well, I used higher levels for shorting again. Global market is providing trigger at this moment as US market slipped massively last night. It is coming after a real long waiting. We have equally seen the massive selling in commodity market too where Gold gave big dent.

We got improved WPI numbers, which has also helped us to close in green but nifty close much away from its intraday top. Now, why gold slipped in this brutal way? Market has a fear that some euro zone country will sell their gold reserve. Imagine one thing, if you are forced to sell your gold which your family owned from long time then what can be concluded for your financial condition? Your answer is the condition of euro zone. So, Mr, Mario Draghi brings this. Sooner or later, all asset class will get this kind of melt down.

In my view, technical figures will remain unchanged. This fall is already coming from my given resistance of 5610. As long as it is below 5610, I can hope for 5447 to 5400 marks. Market would like to see Reliance result also as trigger event. Let us see the figures first. Market has higher hopes.

My point is that we are moving towards some global meltdown sooner or later. This is most crucial week as data from USA and China has suggested for halt in economic recovery.  

Strategy for Nifty April future – I said yesterday to keep an eye on 5500 marks. It hit a low at 5503 in initial minutes and then bounced. This bounce came due to better than expect WPI numbers and some short covering. In the bounce it came at 5600 but slipped in final minutes of trades. I am again saying keep an eye on 5500. If trades sustains for 5-10 minutes below 5500 then we may see fall towards 5450 levels too. It is always better to sell rise in this kind of market.

S&P 500 – I was so tired yesterday as my anticipated fall was not coming. Immediately, we got the selling and S&P 500 came near 1550 levels with a loss of 37 points in a single days. I got a buy signal on CBEO VIX in the mid-March month itself and it has suddenly moved from 12 to 17 now (gaining over 40%). I am expecting a sooner cross above 20 as fear is rising in the market now. I am expecting fall to be deeper for this week now. Chances are higher than we will see S&P 500 coming in the zone of 1500 to 1485 in just few days.

Regards,

Praveen Kumar