14 May 2013: Nifty Elliott wave analysis: Watch out of follow up of this selling. If it comes then Nifty can see fall of another 100-150 points sooner.

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

For 14 May 2013: -

On 13 May 2013, FII bought INR 244.09 crs and DII sold INR 454.82 crs.

I have already said yesterday that if it breaks 6080-6070 levels (which were newer base) then we can see some bigger profit taking. It has broken 6080-6070 and slipped almost 100 points even from that level. Eventually, it has lost the last five days of gain in a single trading session.

Om Saturday, it hit a high at 6114 and then we got a smaller gap down followed by fall. If indices slip from just nearer to previous high then it can be a sign of extreme bearishness. It has broken and closed below 6000 marks.

Indian market has definitely a lot different shapes compared to the rest of the globe. US indices are still running at newer high while European market has also moved to five year’s higher levels. Reasons are very clear that those markets are running on monetary easing.

Well, technical chart of Nifty is suggesting for further sell off or sell to continue. Irrespective of technical indication, it is better to watch out if follow up of this is coming or not. In order to make sell off continue, it is very important that Nifty sustain below 5970 now. If it starts trading below 5970 then we can expect selling to extend toward 5930 to 5900 levels.

One can study indicators like RSI and MACD. I have already plotted on the given chart. On hourly charts, RSI has given too many divergences. On daily charts, it has given an indication of sluggishness before fall.

India VIX has threshold point at 17.84 and yesterday’s high of 17.79. It is an irony that VIX moved higher with rise in index in month of May so far.

Strategy for Nifty May future – I said this earlier also that if May month sell off comes then it may not need reasons. Suddenly Nifty lost more than 2% yesterday. The next technical threshold levels will be at 5980 to 5970. If it breaks those levels then we can expect further bigger selling. It can reach technical levels of 5900 to 5850. On higher side 6024 and 6060 will act as trading hurdles. This is the market of patience.

S&P 500 – I still believe that a top should come at anywhere between 1635 to 1640 range for this week. Will it ever fall? No news is bad news, no higher gap filled up so far. I am eager to see what will bring correction in USA. Technical studies remain same but technical study has no great value in this kind movement. I still have a sell-threshold point at 1616 – 1620 levels.

Regards,

Praveen Kumar