18 April 2013: Nifty Elliott wave analysis: Global gloomy outlook is turning as setback for all global indices. Keep an eye on 5650 support, likely to be tested. If breaks then we can expect good dip. 200 DMA @ 5659.

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

For 18 April 2013: -

On 17 April 2013, FII bought INR 206.68 crs and DII sold INR 260.93 crs.

I have already quoted as 5710 < 5730 as resistance. It hit a high at 5732 and then slipped. IMF has reduced global growth forecasts. We have seen bigger fall in European and American market last night. European markets were already down much when we closed. You can say that Indian market has sustained better yesterday comparing to Europe.

It seems that Indian market were relatively better choice on buy side. One must note that when Nifty was flat then also bank nifty was higher by 0.90%. So, it was over all banks who have dominated the uptrend without any weakness. It is the rate cut hope which has given recent boost. We have RBI monetary policy review on 03^rd May 2013, still a long way to go if global market remains scary.

Yesterday, VIX was higher by 0.70% when market closed dead flat. VIX is showing that rise must be very limited above 5700. We got exactly the expected outcome. We have some critical moving average falling to some important levels. 200 DMA is at 5659 and 20 EMA is at 5650 levels.

I am expecting soft opening then we must look for how market is going to react at 5650. If it breaks and sustain below 5650 then it will again open newer and lower zone for trades.

Specially note that CCEA meeting will be conducted today evening where market may expect some policy related decision. I can never bet on Indian policy makers. If it comes then good else same story will be repeated. There may be some decisions on land acquisition bill and some decision on relief package for exports.

Strategy for Nifty April future – It does not matter how it open. Important will be if it can break 5660. Further fall towards 5600 is expected on the break of 5660. Suppose, if it is not breaking 5660 then it will just turn choppy. Take a note that market will on long weekend now so some caution movement is expected in the second half and it will be in favour of European market trend. I will still say resistance at 5730 + levels and fall should come. Hope on CCEA may try to save some extent.

S&P 500 – I was expecting a washed out of Tuesday’s recovery. We got that and S&P 500 got exact support @ 50 DMA. It hit a low at 1543 which was nearer to 50 DMA. This is fine. Now, I will look for support at 1543 and break of 50 DMA will be next requirement for fall towards 1500. I am expecting this to happen tonight. Ben Barnanke is saying that economy is recovery but IMF has different words. Time has come to know the reality.

Regards,

Praveen Kumar