25 June 2013: Nifty Elliott wave analysis: If global cues turn supportive then first bounce will come in Indian market. Technical support is at 5545 and confirmation point for bounce is cross above 5640.

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

For 25 June 2013: -

On 24 June 2013, FII sold INR 1552.98 crs and DII bought INR 931.11 crs.

Day after day FIIs are selling huge. So far, in terms of money flow, this is worse month since September 2011. They sold INR 9073 crs so far. Suddenly world is bleeding from past just three days. Nifty lost more than 200 points in past two days.

Market is absorbing too many shocks. Firstly, it was rupee weakness then it got fed shocker and now it is digesting China fear. Almost every single global index is heavily oversold in short term. A bounce or recovery deserves but before that we need silence in news flow. Some sort of bottom buying has happened in US market last night as it was well off the lows and futures are also little higher.

Technical charts are giving support but every single support has broken in past 3 – 4 days. I was expecting it to save 5600 but that has also broken and now hopes for support at 5545. I must say that it should not come close to 5545. Small positive divergence is emerging on daily chart and based on which I am betting on recovery.

Note some threshold point. If Nifty manages to stand tall above 5640 on 5 minutes chart then only expect some sustainable recovery. Is it going to happen? Let us see. Note that INDIAVIX is now well above 21, even yesterday it shoots up to 10%.

Strategy for Nifty June future – SGX NIFTY is giving signals for a flat start which is itself a big thing. It may improve more before our market open. We got 45 points of intraday recovery yesterday from low. It is giving a sense that 5556 should for some time. Crossover of 5630 will generate for the test of 5683. A point of 5683 will be litmus test for recovery.  

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”.

US market is at the lowest point of past two months of trade. Now it hit a low at 1560 with good cool off in VIX. It is still concerning that it has closed below 100 DMA. I am expecting 1560 to hold as panic low. We can expect recovery towards 1600 now. Remember, Tuesday has a good history for bulls. Will it be another rising Tuesday?

Regards,

Praveen Kumar