21 June 2013: Nifty Elliott wave analysis: Another bad opening ahead below 5600. Expect a bounce from low only if RBI comes to help Indian Rupee. Support – 5570 > 5550.

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

For 21 June 2013: -

On 20 June 2013, FII sold INR 2094.06 crs and DII bought INR 1332.50 crs.

FII has sold massively again in Indian market. They sold 6351 crs so far in June month series. It was not only QE which has changed sentiment but also weaker Indian Rupee that has played important role. Nifty is 600 points away from its recent 52 week high. Only small selling by FII pulled Indian market so much. Just think that if they really sell.

When market was rising it was never looking to move lower. Now, when it is going down then it is not looking to recover. Fear can do this kind of damage. US market slipped further 2.30%. It is overdone but there is no solution for this kind of fall. US market is still down by only 6% from its all-time high. It is looking heavily overdone and over sold for two days kind of time frame.

My prime concern is still Indian rupee. Every 10% depreciation of Indian rupee cost 0.80% on WPI and 0.60% (of GDP) on CAD. Without RBI intervention it is just not possible to see any pause in ongoing impact on equity, commodity, forex or bond market. This logic is just not acceptable that it is happening all across the world. Truth is that nothing is comparable like Indian Rupee. On 01 May 2013, Rupee was at 53.66 and now on 20 June it was at almost 60.  Imagine the damage. Many mid cap and small cap stocks will see the impact on its quarterly numbers. So things are clear enough that do not invest money in mid cap or small cap stocks in dip. Be in index stocks only.

Technical charts are now giving support at 5620 – 5600 levels. Further break will give 5550 levels too. This market has entered in a phase where nothing is impossible for bears. The way Asia is trading now, it is all set to open 1% lower again. Now, only god can help equity price.

Strategy for Nifty June future – SGX NIFTY is again trading with a loss of 60 points and hinting opening near 5580. It has slipped beyond my imagination. The way it is trading at 5580 is showing the panic. We are almost down by 300 points in a matter of few minutes. Take 11% down levels from 6230, it is coming at 5544. Below 5630-5620, only meaningful support is at 5544. Expect a strong rebound if RBI comes forward to help rupee.

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 thought that I should see 1600-1598 but it has overdone and hit even 1585. Now one can expect rebound as relief rally. It is true that US market got follow up of selling and so this market is turning short on rise. Shorting should be done after a rise only. Now, I do not know the magnitude of bounce. Immediate support is at 1580-1575 levels.

Technical charts are crying for a bounce but it is still hard to say is it coming or not. Buy only a positive market.

Regards,

Praveen Kumar