04 June 2013: Nifty Elliott wave analysis: Nifty came in the support zone of 5930-5900 levels. Any break below this trading range on closing basis will cause another round of sell off. A bounce for relief may come.

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

For 04 June 2013: -

On 03 June 2013, FII sold INR 86.67 crs and DII sold INR 71.81 crs.

Yesterday was second trading session in a row where FII has sold net in cash market. It has no direction relation with market movement but it is a reflection of market momentum which is slowing down now. I have said this too many times in past also that Indian index is under performer. The consequences of this under performance will be slowing FII momentum. FII has pushed so money in the year 2013 but still indices are at the same levels where it has opened for the year.

I am expecting a stock specific movement for today’s trading. If some index heavy weight stocks perform then index may come higher too. Yesterday, Infosys has saved the possible downside breakout.   

Technical charts are suggesting for support to emerge between 5930 to 5900 levels. On daily chart, it is a development of H&S pattern with n-line at 5930-5900 levels. We may get a typical bounce from n-line before decisive fall. It is difficult to say that this bounce can able to bring Nifty even close to 5980-6000 levels.

The length of n-line to head is almost 300 points i.e. from 6230 to 5930. Rough idea suggest that break of this n-line will lead Nifty towards 5930 – 300 which equals to 5630 levels. Is it coming? I will look for technical confirmation below 5860.

Strategy for Nifty June future – SGX Nifty June future is at 5950 which is 8 points down. This is giving a hint for flat opening. Yesterday’s low will give a trading support at 5925 levels. I expecting that a negative day will be dull day which on rise it will face resistance at 5980. So far it is showing that this market is selling on rise. Take a note that now market is forming lower low. I want to see how Nifty is going to react at 5925 and 5860 levels.

S&P 500 – I repeat that that 80% chances are that S&P 500 has made a top for the year 2013. I was expecting a soft bounce which came. For intraday, this rebound came from 1622. The best bounce should also fail above 1660-1664 levels. Yesterday’s bottom may act as trigger for selling for rest of the month. It will have trading support at 1633 levels. Take a note that yesterday’s closing it still just at 20 days exponential moving average. I am waiting for a selling which gets follow up of selling.  

Regards,

Praveen Kumar