12 June 2013: Nifty Elliott wave analysis: Panic fall below 5860 gave 5780 so far. It should extend towards 5764-5710 levels too. On higher side resistance will be at 5850 levels. All eyes should on INR, IIP & CPI.

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

For 12 June 2013: - 

On 11 June 2013, FII sold INR 885.85 crs and DII sold INR 313.42 crs.

I have already said earlier also this market is testing patience of FII. They value of investment has reduced further due to weak rupee. Bank of Japan has refused to do anything further to boost economy. This has given additional pressure on global market. Every single global market is in red. So, can we say that we are entering in the phase of sequential roll over of easy money? Sooner or later, it has to happen. US market has slipped again on the same fear.  

Prime concern for Indian market is weak rupee which hit 58.98 against US dollar yesterday. I have warned for this situation last year itself. Few days ago I have highlighted about FII sell figure which came in the range of 5900-6000 levels, which has happened first time. Now those sell figures may intensify. A weak rupee is adding fuel to this money out flow. Just forget IIP and CPI data if rupee gives any further weakness. No good news is good news for market in this kind of worse sentiments.

Technical charts were giving the hint of this selling due to H&S pattern and we got it. Now there are few key levels to watch. Firstly, note that 200 days moving average for Nifty is at 5794 levels. Secondly, take 61.80% retrenchment from 6230 (against the rise from 5477 to 6230), it will come at 5764 levels. So on charting basis, we are entering towards support levels. Market will bounce on the day of excessive pessimism.

Expect IIP data to come above 3% and CPI below 9.50%.

Strategy for Nifty June future – Expect another soft opening for market as SGX Nifty is giving 30 – 35 points downside opening. After weak opening keep an eye on 5750 levels. Any failure below 5750 will cost us for fall towards 5710-5700 levels. On higher side we will see resistance at 5850 levels. Shall we buy at low after a gap down? Yes, I may opt to buy depending on rupee situation.

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”.

So, it is a fall below 1633 again. Take a note that S&P 500 has two important supports; one is at 1608 and next at 1598. I prefer to ignore the mild bullish pattern and sensing for re-test of 1598. On higher side it has failed the mentioned resistance of 1653 levels. It is the fear of roll over of QE and it will not end so soon.

Regards,

Praveen Kumar