29 April 2013: Nifty Elliott wave analysis: Reversal selling will start this week. First meaningful support will come at 5750-5700 levels. Global trend and RBI monetary policy will play major role. Who will disappoint first?

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

For 29 April 2013: -

On 26 April 2013, FII bought INR 224.75 crs and DII sold INR 377.78 crs.

I was not able to present my studies for 26^th April due to some personal reasons. So, I am adding development starting from post expiry day. Perhaps it was wildest derivative expiry for recent multiple months. Nifty took a fast upwards swing due to short covering in last 30 minutes. It was big and huge.

I can conclude that expiry day top was a ‘pop up’ top. We should focus on some interesting “May month” consequences. We have seen May month dip in the year 2010, 2011 and 2012. The way this top is finishing in the April is itself an indication for no-better May month.

US market had formed a Doji pattern and we got a small dip on Friday’s trading. It is completely true that US market has no bad news as bad news. Something should come any time to stop that kind of gains or stability.

Technical charts are suggesting that a new down trend is about to start now. I believe that expiry day top 5924.60 will remains a crucial resistance and it may remain untested for recent days at least. I have already quoted earlier also for 5969 as crucial levels. Once it starts trading below 5869-5860 levels we will immediately see levels of 5829 to 5800. Sooner or later it has to start. I feel that even if market consolidates then also it will be fall.  I do not think that Nifty can try to cross 5910 even on higher side.

Strategy for Nifty May future – A pausing day was expected and it came on Friday with soft close. It should come to the technical levels of 5860 for today’s session. A further move below 5860 will confirm the reversal of trend. Nifty May future should see selling pressure for almost all trading session of this week. Crucial resistances will be at 5910 and at 5930. It is better to note that Bank Nifty may give a larger impact on trading movement. A clear trend will emerge after today’s trading sessions if it manage to close below 5860 levels.  

S&P 500 – I have written about May month sequences above. It is equally true for S&P 500 also, As long as S&P 500 is staying below 1598, it should just go down. It may take time as bulls are strongest in USA. For this week, S&P has support at 1540. If it breaks 1540 then we can expect a gradual down trend towards 1500. My studies all most remain same but it is just buying too much time before acting. It is still ‘a bulls favour a lot’ market but this can change with May month.

Regards,

Praveen Kumar