23 April 2013: Nifty Elliott wave analysis: It has next resistance at 5870. We are close to make a small top but not yet confirmed. It requires the break below 5784 (strong support) to bet for some meaningful correction.

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

For 23 April 2013: -

On 22 April 2013, FII bought INR 915.82 crs and DII sold INR 442.54 crs.

Money is again flowing into India. Nifty gained over 6.50% from its recent intraday low of 5477 levels. Nifty has critical resistance in the zone of 5830 to 5870. As shown in the given chart, 5870 is 61.80% of retracement against the fall from 6111 to 5477.

Market need to respond on the announcement done by CCI last night. Well, but there were no decision on coal pooling. We are entering in big – banking result from today onwards. HDFC Bank will prefer its figures today. Equally APPLE and AT&T will also present its figures today. Our market will take cues for further moves. Note that Cairn India has presented poor result.

India VIX goes higher by 5.60% yesterday but small cap and mid cap indices were on better relative gain. We have holiday tomorrow and day after tomorrow we have derivative expiry. Market is looking to change almost everything in past eight trading sessions. I do not think that market has any big short in the market now.  

A pullback is very likely after smart gain. It is still not clear if we got the top before pullback. I am repeating that it is banking stocks which have dominated in recent recovery. Bank Nifty has seen the rise over 16% in past few days and still there is no sign of any profit taking. If pull back comes then it may have money waiting to buy.

Politics can be capable to give shocking movement anytime. Take this as precaution as long as budget session run. Coal and 2 G scam is attracting politician again.

Strategy for Nifty April future – It was giving me a sense that it will respect the resistance at 5830 levels but it has broken higher in last 30 minutes of trading. Crossover of 5830 is giving hint for 5870 but we are heavily over bought now. I am expecting some pullback now before making further move. Well, derivative expiry will play its important role now. So, we can expect stiff technical resistance at 5870. Equally, as long as 5790 saves it may deny big for bears. A great down side break can come only if it sustain below 5790. Is it coming?   

S&P 500 – It hit 1548 before bounce yesterday. It has entered in the resistance of 1560 to 1565 levels. Futures makes a high when are trading and futures makes a low when US is trading. For us, it will open down. Yesterday’s rise has generated a pattern for bounce but as of now US and EU futures are trading lower. I want one close below 50 DMA but that has not come till now. It is fluctuating between 20 EMA and 50 DMA. Let us see the impact as almost every single Asian market is trading with softness now.

Regards,

Praveen Kumar