23 May 2013: Nifty Elliott wave analysis: It is a close below 6100 and we have a chance of moving towards 6050 to 6100. Fed given a hint for roll back of QE.

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

For 23 May 2013: -

On 22 May 2013, FII bought INR 540.19 crs and DII sold INR 973.15 crs.

It was another post 2 pm sell off and Nifty closed lower below 6100 marks. I cannot say that it was unexpected. For some reasons, Indian market is under performing its global market. Indian rupee too has shown further weakness.

Well, we have seen chaos last night in US market. Firstly, Ben Barnanke has said something but fed minutes was completely different. I can still say that even US market should be watched for follow up selling. It will be too early to estimate bulls.

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, RSI has already given negative divergence and a sell on daily chart. Now, MACD is almost giving sell on daily chart.

We have four crucial results today – SBIN, Tata Steel, BHEL and JSWSTEEL. It will be jumbo day for result and very important as LT has disappointed yesterday.

SGX Nifty is right now at 6098, down by 13 points. I am expecting another weak opening and Nifty will see selling intensifying in second half. Reactions are expected on quarterly numbers depending on figures. Keep an eye on SBIN’s NPA number.  

Strategy for Nifty May future – It hit a low at 6081 yesterday. It will be important to note that break below 6077 will give another strong sell signal for a move towards 6040 levels. On higher side 6125 will act s stiff resistance. I am already expecting for a move towards 6000 marks before expiry. One more negative close on US market can put a lot of dent on sentiment in India.

S&P 500 – It hit another high at 1687 but it was a different day. S&P slipped from higher point with dancing views of Ben Barnanke. It finally closed at 1655 with some trade below crucial 1650 too. If we get a follow up today below 1650 then it will be a confirmation of reversal.

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 1481 and S&P @ 1655.

Regards,

Praveen Kumar