21 May 2013: Nifty Elliott wave analysis: Trading support will be at 6140 and then at 6110. Global silence may push Indian indices lower towards 6080. Higher resistance will be at 6230.

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

For 21 May 2013: -

On 20 May 2013, FII bought INR 753.37 crs and DII sold INR 764.30 crs.

It was last hour which was full of action for bears. Nifty has slipped sharply from higher levels. I have already said that we may see a fall from higher levels in second half of trade. Nifty hit a high at 6229 while technical resistance was supposed to act at 6240.  

It is more important to note that almost all global markets are flat to negative with this morning. Market man will prefer to see Fed minutes which have scheduled to come on Wednesday. There are some threat that Fed may act to rollover partial QE. Market may turn more speculative today. Question is – Can US market sustain higher if there will be roll back in QE?

Technical charts are suggesting for a technical support at 6140. Now, suppose if it breaks then we can expect the test of support at 6110-6100 marks. Moving on higher side it will face resistance at 6200 and 6230. I am still not denying the possibility of rise on index as it is still above threshold point.

Following the history, Indian market may prefer to give moves in second half of trades. It means that I am expecting a dull first half if is it saving 6140 levels. SGX NIFTY is giving a hint for flat opening.

Strategy for Nifty May future – It has missed 6240 by just one point yesterday. We have seen sudden sell off in the second half of the session, especially in last hour. One can expect trading resistance at 6200 and 6240. In the down side, break below 6150 will drive it lower towards 6110-6100 levels. There is no running away from volatility. Key is – Are we going to see follow up of yesterday’s pullback?

S&P 500 – It hit another high at 1673 but closed with a loss of 7 points from its intraday high. People at USA will prefer to see what Fed is going to say about QE. One must note that the rise from 1536 to 1673, there is no correction and there is a gap up from 1599 to 1610. Another thing that you need to note is that S&P 500 and its 200 DMA has biggest difference so far in the history. 200 DMA is at 1478 and S&P @ 1667. I say, correction is a natural law and it must come but I have no idea when will it come.

Regards,

Praveen Kumar