22 May 2013: Nifty Elliott wave analysis: Break below 6100 will push Nifty lower towards 6050 and then 6000 levels too. The decisive fed comment will be on eye tonight.

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

For 22 May 2013: -

On 21 May 2013, FII bought INR 679.44 crs and DII sold INR 866.70 crs.

Closing basis, market has closed negative and closed near to the day’s low. It has just saved critical 6100 levels. This is not sufficient to define market movement as we have seen a rebound of 60 points in the period between 1:40 pm to 1:50 pm. It was bull’s attempt which has failed miserably in last one hour of trades. It put a big dent on hourly chart. 101%, this kind of bounce cannot be predicted. This is making trading troubling.  

We got a dip when global markets were stable to silent. It is noticeable that Indian market is again under performing the global markets. One must note that India rupee got another sharp depreciation against USD. It is now at 55.30 levels which is lowest of last six months. It is again giving fresh threat of broadening trade deficit.

Technical charts are suggesting that break below 6100 will push Nifty lower towards 6050 and further break will cause a test towards 6000 marks. So far, nifty is 2% down from its recent high. RSI has already given negative divergence and a sell on daily chart. Now, one more negative close may create sell on MACD as shown in the chart.

SGX Nifty is right now at 6140. I am expecting another dull first half after 15-20 points higher opening and then second half will again give wild moves. Preferable hours of trade will come after 2 pm. Note that from past three days, post 2 pm trade direction remains unidirectional.

Strategy for Nifty May future – An intraday pullback from 6125 to 6190 has failed. Close below 6125 has generated sell again. Now, suppose, if it breaks 6105 for today’s trading with volume and time then we can expect further 55 points of slide. It will give us target near 6050 levels. Any higher opening will get sold at higher levels.   

S&P 500 – It hit another high at 1675.20. It seems that nothing can stop US market. All technical indicators are dead right now. Ben Barnanke will release his view on QE which is expected to be dovish. Will that able to bring correction or will that give another leg of rise? Let us see.

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