19 June 2013: Nifty Elliott wave analysis: Nifty came just above 5860 and the slipped. Condition remains same; it has to stand tall above 5860 to get further gain. Support at 5800-5790. Caution ahead fed meeting.

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

For 19 June 2013: -

On 18 June 2013, FII sold INR 597.38 crs and DII bought INR 582.65 crs.

FIIs has sold INR 3712 crs so far in the month of June in cash market. This is definitely concerning now. They sold for six days in a row. It is reflecting that money is flowing out when rupee is weaker. I can say that Indian Stock market is trying its best to fight against all odd.

US market moved higher to close at the highest levels of past two weeks. Those markets look stable before fed meeting which is scheduled today. I am concerned for weakness in Indian rupee. It hit 58.82 yesterday too and this was prime cause of yesterday’s fall from high. One can say that FII were selling but it is very important to understand the cause which drives them to sell.

It looks like RBI and government of India left currency market for free float. They have not taken any action yet. Now this is alarming situation and they cannot sit ideal. For today also, stock market might be nervous for the same factor. Any weakness below 59 will cause the test of 60. No action will drive Indian rupee towards 63-64 levels. Indian policy makers are just best in doing one thing, i.e. ‘doing nothing’.

Last year also I have criticized the hope over FDI in retail. Look at current situation. No fresh dollar came yet and rupee weakness continues. Policy maker has to understand that they need to act more than making policy.   

Technical charts are still suggesting for support at 5790-5800 levels which is almost the range of 200 DMA. On higher side we need to stand tall above 5860 to see further gain. Yesterday it came but failed in just few seconds confirming the resistance.  

Strategy for Nifty June future – Right now SGX Nifty is higher just by 10 points showing concerns over weak Indian rupee. Immediate technical support will be at 5800 and 5785 levels. On higher side 5860-5870 will be key resistance and threshold. There is no levels and direction for today. All will depend on Indian rupee movement. It is better to move out of long if Indian rupee breaks 59 also.

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 1653 and I got it on the higher side. We have double bottom at 50 DMA and now looking good before fed meeting. It is looking like that market is turning optimistic before Ben Barnanke’s decision. For today’s session, if it stands above 1653 then news may be in favour of bulls. Technical charts suggest that crossover of 1653 will give a move towards 1675-1688.

Regards,

Praveen Kumar