24 May 2013: Nifty Elliott wave analysis: Close below 6000 may force us to change short term view. Technical support is at 5950, break will push us lower further towards 5860. Resistance is at 6050.

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

For 24 May 2013: -

On 23 May 2013, FII bought INR 316.23 crs and DII sold INR 538.75 crs.

Japanese blue chip index Nikkei has slipped over 7% yesterday. It was a characteristic one day drop which comes after sharp rise. Indian market was also under that fear although we have not seen as much as rise Japan has seen. Right now, Japanese market is recovering after yesterday’s shock.    

Last night, US market covered almost a very big part of the loss which was indicating while we were trading. It may be the bulls attempt to save. Bulls at USA did their best but threat will alive. It has almost slipped by 350 points from its Wednesday’s high and so far, recovered by 50%. I can say that US market has not got any strong follow up of selling.

We got some crucial result in past few days where LT and SBIN have disappointed a lot. On other hand, Tata Steel has given result in line with market expectation. Almost all blue chip stocks have delivered their number but most has disappointed. We can say that India’s earning were not as good as developed market. This might be the reason that our market remains a under performer.

Now a lot depends on monsoon development.

Technical charts are suggesting for immediate support at 5950 to 5930 levels. On higher side we will have resistance at 6024 to 6048 levels. I am expecting a choppy trading session.

Strategy for Nifty May future – SGX Nifty is hinting for start at 5990 levels which is not as better as US market has recovered. After such opening, technical resistance will be at 6020. Crossover of 6020 will push it towards 6050. In the lower side, break below 5949 will give fresh wave of panic. Charts are showing that market will head towards lower levels with some consolidation. Note that 5949 is the 38.20% retracement of rise from 5480 to 6239.

S&P 500 – It has seen a drop from 1687 to 1636 in the matter of 24 hours. Now it has closed at 1650 which is a dot resistance. I will not say that pain is over. In fact, it is the beginning of pain. So far, strongest bulls of the world have held their market in a good way. Let us see for today. Break below 1636 will give us 1600. It should come and market need to find its excuse for that.

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