06 June 2013: Nifty Elliott wave analysis: Nifty is still below 5930 and so it is opening room for fall towards 5860. It is struggling near n - line. Technical resistance is at 5960 – 5980.

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

For 06 June 2013: -

On 05 June 2013, FII bought INR 88.49 crs and DII sold INR 99.75 crs.

Money flow is turning sluggish and this is true for the world. We need to note that it was easy money which is a driving force for rise. Now, people at USA are scared about rollback of quantitative easing. Fear was visible in US market last night. Dow Jones has closed below 15000 marks. Remember that every single global index got its top in the month of May and now the fall is extending. Indian indices remain laggard.

I cannot change study too much compared to yesterday as Nifty is still below 5930. It is clear that we are going to see gap down opening. Technical charts are suggesting that break below 5880 will cause the test of 5800 levels. The way market is moving, we can conclude that time has come for H&S pattern to act. H&S pattern is giving technical target in the range of 5700 to 5650.

We got pullback yesterday from lower levels. This pull back was driven by Reliance and some other heavy weight. All eyes are on Reliance AGM where market men are expecting Reliance’s plan for telecom services and details about D 55 gas block. In my view, people are expecting too much from Reliance. It has triple bottom at 780. Break below 780 will cause massive fall.

This market will be about stock specific selection. Out performing stocks are not falling and shorting those may not be good idea.

Strategy for Nifty June future – Right now SGX Nifty is down by 50 points and giving a hint for the break of threshold 5895. Charts are suggesting for panic if it breaks 5895 levels. It should be a break of 5-10 minutes to bet for fall. Next technical target will be at 5860 and then 5800 levels on desired break. If it saved 5895 then it may again see a pullback from lower levels.  

S&P 500 – I am keeping this line as it is. “I repeat that that 80% chances are that S&P 500 has made a top for the year 2013”. I was expecting a test towards 1600 marks for this week. Yesterday we got a low at 1606.70. It is down by almost 5% from its recent peak of 1688. It may not get a pause right now and fall should extend towards 1575. Will it consolidate again before? May be yes but final outcome will be a move towards 1575 on the break of 1600.

Regards,

Praveen Kumar