17 April 2013: Nifty Elliott wave analysis: Cross-over of 5610 has given its typical rise towards 5700. It may extend more but fall is again very near from higher levels. I do not think we hit the bottom yet or recovery top yet.

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

For 17 April 2013: -

On 16 April 2013, FII bought INR 591.75 crs and DII sold INR 204.89 crs.

We have seen massive recovery in Indian market and it denied all negative cues from USA. Prime reasons for this rise were hope of rate cut in up-coming monetary policy review and easing crude oil price. Hopes were also there from Reliance result which delivered good numbers after-market hours. Numbers are good but not good enough to see any good rise. (I would not surprise after moderate high and fall).

There were few remarkable formations yesterday. First is, Nifty moved above 200 DMA very easily. It was never looking like we were crossing 200 DMA. This is was a good part.

It is not that everything was good only. Look at India VIX. When Nifty gained by 2.30% VIX slipped only by 2.20%. This fall on VIX is not as per market movement. This indicates that traders are still fearful towards this rise. Now, suppose if VIX stay above 16 for today also then we might be near to another leg of sell off in coming few days.

Well, we have seen recovery in USA market last night but it is not generating pleasant development. If Indian market is rising on hope of rate cut then I must say that I am also expecting rate cut. I am saying one more thing that banking stocks has already done comparing to the hopes.

Corporate earnings in India are not as strong as USA. Indian market will soon begin the phase of underperformance. Today’s trading is crucial. I will look for follow up trading. Nifty will have trading resistance at 5710 < 5730 and then final at 5800 levels which I am not expecting to come.

Strategy for Nifty April future – Charts were demanding for trades below 5500 to go lower but that condition never came. Driven by banking index, it may try to maintain higher levels but we have gradual resistance at higher side. If you take rough calculation then you can observe that we got 250-300 points of recovery after each fall. In my view 5720-5725 is a critical zone of resistance. In the lower side if it sustain below 5675 for 5-10 minutes then we can see dip towards 5625 in few hours.

S&P 500 – A recovery came after Boston blast. Is it changing things a lot? In my view, this pullback cam for good for bears only. It may not be trap for bears like after-job-data rise. I am not expecting a re-test of higher levels like 1590. We are going to get a higher levels fall again. Surely, bears had not easy deal in past few months so traditionally this may test patience. If market get a bad after good day then things will be critical. Is it coming?

Regards,

Praveen Kumar