17 June 2013: Nifty Elliott wave analysis: As long as it stands above 5780, it can try to take a move towards 5860 levels. Another crucial RBI’s monetary policy review is coming today.

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

For 17June 2013: -

On 14 June 2013, FII sold INR 305.68 crs and DII bought INR 910.62 crs.

Above money flow is a hint for lacking FII’s confidence now. FII has almost sold INR 3000 crs in June month so far. I am not giving very high important to these figures but equally I cannot even neglect those. It is a known fact that FII has invested their money in very selective stocks and many has not performed yet.

We have another crucial monetary policy review. There is no expectation this time as INR has depreciated very sharply in past few days. It hit 58.98 few days back but now it is at 57.50. This must be beyond comfortable limit for RBI. Economy data like WPI and IIP numbers are still giving a hope for rate cut. My expectation is that RBI will give 25 bps CRR cut.

Technical charts were giving this hope of recovery from Thursday onwards itself. US market has slipped over 0.60% on Friday night. Still Indian market may try to advance and it will take cues from RBI policy. If policy comes supportive for market then we will see good rise and short covering too. One must note that this market has ample short position on hold right now. Those shorts will cover if RBI gives anything positive.

We got expected fuel price hike on this weekend which is good news for Oil Marketing Companies. Let us see RBI policy before deciding next move. I hope for positive for market.

Strategy for Nifty June future – Right now SGX Nifty is down by 15 points which is am impact of Friday’s weakness in US market. Technical charts are suggesting that it will get immediate trading support in the zone of 5780-5770 levels with final support at 5740. A break below 5770 can give 5740. On higher side, cross above 5825 will invite short covering. We should be ready for extreme volatility. I prefer to trade in post policy hours only.

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”.

It has saved 50 DMA twice in past few days. I have already said for 1624 as support and S&P tried to take support there. Now I believe for choppy movement till Fed meeting. It will move in the range of 1608 to 1650 and will not break on either side. I am assuming for trading support at 1624 & 1618 for today’s trading with some higher biasing towards 1643-1650.

Regards,

Praveen Kumar