18 June 2013: Nifty Elliott wave analysis: Nifty need to stand tall above 5860 to get further gain. Support stand at 5800 levels. Caution needed before fed meeting.

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

For 18 June 2013: -

On 17 June 2013, FII sold INR 165.10 crs and DII bought INR 361.53 crs.

Why I never give more important to cash FII figures? Look at a fact that FIIs were buying aggressively when Nifty was near 6200 and selling when Nifty is at 5800 levels. Well, it is still a bad signal for India’s money flow. It is signaling that FIIs are may fed up from Indian market for short term money investment.

RBI has again disappointed street but market forget it as ‘no event’ and advance higher. It has saved the possible short covering. Derivative data suggest that traders are still shorting this market. Now, USA market is very close to get some decision on QE. Fresh fear is that there may be some tapering statement over QE in upcoming fed meeting. One day they say ‘yes’ and next day the say ‘no’ on speculative mode. The way US indices are moving, I feel that it is better to be cautious note.

Technical charts are still suggesting for continuation of rise. When Nifty was falling from higher, 5850-5860 levels has acted as strong support before failing. Now, that level of 5860 is acting as tough resistance. I will try to maintain my bullish views only if we spend good time above 5860 levels. It is just 12 points away but this is most crucial 12 points.

In the downside, we will get good trading support at 5800. It is likely to be a choppy session.

Strategy for Nifty June future – Right now SGX Nifty down by 5 points and it is trading at 5835. It is looking for a pause before crucial 5860-5880 levels. It will not be a good sign if we fail to cross 5860-5880 levels today. Failure will cause higher selling. Market dynamics are showing that if fall comes then even recent low of 5680 might be under test.

Can we say that bounce has done? It cannot be concluded so easily but I am also turning cautious before fed meeting.

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 said for the biasing towards 1640-1650 and it hit a high at 1647 before giving up gains. I am equally saying that failing above 1650 is also not a good sign. Stocks are on flip flow mode before fed meeting. It is not a bull’s friendly moves as of now. Expect a choppy session. Remember last three Tuesdays were not good for market but before that we got rise for 21 consecutive Tuesdays.

What’s coming this Tuesday?  S&P 500 is still above 20 EMA.

Regards,

Praveen Kumar