28 May 2013: Nifty Elliott wave analysis: Derivative expiry pushed for wild volatility. Strong technical is at 6030. As long as stay above 6030, expect 6100 to 6130.

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

For 28 May 2013: -

On 27 May 2013, FII bought INR 406.03 crs and DII sold INR 516.39 crs.

If you focus on movement cycle then you may feel that most of the time Nifty takes big movement in post 2 pm hours of trades. Yesterday was no different. Nifty moved sharply in last sixty minutes. Nifty moved from 6025 to 6100 from 2:30 pm to 3:00 pm. Idea to mention this is that market has limited its action in some particular timing. We can say that it was short covering driven impulse.

I have already said that further fall will be possible only if Nifty manage to stay below 5930 but it has never satisfied that equation and hence moved higher. Yesterday’s high was at 6099.90. So, for today’s trading if it manages to stay above 6100 then we can expect another round of short covering to a move towards 6130-6150. So far SGX Nifty is giving sign of flattish opening. We must remember that it is derivative expiry week. More importantly, it is the month where Nifty hit its multi month high too.

Technical charts are suggesting for support at 6048 to 6030. As long as it is staying above 6030, we can expect this rise to continue. I must say that trading will not be simple till Thursday. Keep an eye on Japanese market too. It is not impacting but it is equally tougher for the world to ignore if Nikkei slips below 14000 marks.  

Strategy for Nifty May future – SGX Nifty May future is at 6075 right now which is almost flat. Technical support will be at 6035-6030 ranges. It is expected to give the re-test of 6100 marks for today. Crossover will give us a move towards 6130-36150 levels. Move above 6100 will be governed by short-covering. If it breaks below 6030 then it will reverse the momentum.

S&P 500 – It 20 days exponential moving average at 1633 which has saved in past two days and market rebounded from a nearer level. Now, 1633 is a good technical support. Only break of 1633 will show any further sign of weakness. Will strongest bull of the world allow S&P 500 to slip below 1633? Let us see tonight. MACD gave a sell on daily chart. RSI has already given sell few days back. Weekly charts are saying for, “Wait and watch if it breaks 1633”.

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