17 May 2013: Nifty Elliott wave analysis: As long as it is holding above 6110, it may not give easy signal for profit taking but another critical resistance is ahead. Resistance is at 6200-6240.

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

For 17 May 2013: -

On 16 May 2013, FII bought INR 1070.32 crs and DII sold INR 390.42 crs.

It was a choppy trading session after a breakout on Nifty at 6120. Well, we have seen 700 points of run up on Nifty and it was looking to face resistances on rise but it has broken every single resistance. Next such crucial resistance is at 6200 marks. Derivative build up is giving a hint that if it manages to cross 6200 marks then we can expect a move towards 6240-6260 levels on short covering rise.  

This market may not give easy sign of give up as long as it is staying above 6110-6100 levels. Now suppose if it fail to cross above 6200 marks then it will turn dull like yesterday. So far, this market is looking to be buying on dip market.

Although SGX NIFTY is giving signals for slightly higher start but global cues are not as strong like past few days. Government is planning to speed up its disinvestment program. Perhaps, SGX NIFTY is reflecting those impacts.

Market is likely to give its reaction on ITC result impact which is expected to be coming today. Will it surprise like HUL? SBIN chairman said that he is not expecting rate cut in June month monetary policy review.

Strategy for Nifty May future – It is moving with higher high and higher low. So, it is a better idea to add long trade on the cross of previous day’s high. So, in that way, cross above 6198 will give another 30-50 points of rise. In the lower side we will get trading support at 6160 levels. Break of 6160 can give a fall towards 6120-6110. Anything below 6110 will be critical and crucial as well.  

S&P 500 – There are some talk of roll back of QE in this summer. This is making US market little nervous. Fed may reduce its bond buying program. It has seen a fall from 1661. US market futures are showing sluggish sign this morning. One more dip and then we can be in better position to conclude for some correction. I must add that charts have no such history of such overbought market in the world. I am hoping for 1635 now if fall continues.

Regards,

Praveen Kumar