27 June 2013: Nifty Elliott wave analysis: Expect GAP up to trap bears from 5600. Cross above 5640 will give 5683-5700. A litmus test @ 5683. Weak GDP data fuel rise in US market.

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

For 27 June 2013: -

On 26 June 2013, FII sold INR 547.79 crs and DII bought INR 336.98 crs.

It was another day of money outflow by FII in Indian market. We saw Indian rupee hitting 60.63 against USD. All thanks to RBI and MoF. It is weak Indian Rupee which has given a dent in Indian market. If you look at global indices then one can understand that those are out of ‘QE rollback’ shocks. Weak rupee is going to fuel inflation further as fuel price hike is coming soon. Now, in order to improve sentiment to minimize dollar out flow, RBI need to opt for bank rate cut. It is beyond my understanding what RBI is waiting for.  

I still have a view that I will not short this market from 5600 levels as positive divergence is emerging. As long as 5570-5545 is saving, I cannot see any big reason to sell stocks without any recovery. Yesterday’s last 30 minutes selling was due to rupee weakness. Market gave a huge punishment to many mid cap small cap stocks which are supposed to give poor quarterly numbers on currency weakness. At some point market will start ignoring ‘pessimism’. We should be close that point. 2-3 days in time and 1 percent on Nifty may be considered as approximation.

I have already said yesterday that Nifty need to stand above 5640 at least. Once it crosses 5640 then litmus test will come at 5690-5700. My technical condition remains same. It is looking like to see higher opening. So, bears may see a trap now.

Cabinet – CCEA meeting is scheduled today to discuss gas pricing issue today.

Strategy for Nifty June future – SGX NIFTY is giving signals for much better start. What is the reason for this kind of higher trade on SGX Nifty? If we really going to see opening above 5640 (very likely) then we will see bears to cover their shorts by force. It may hit 5683 then. I said earlier that 5683 is litmus test point for Nifty June future. Let us see if it crosses by today.

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”.

From a low point of 1560, it got more than 3% rebound and closed well above 1600 marks. I have already said that we may see fresh momentum on rise on the cross of 1600. We got the condition and now expect further massive rise in US market. Technical charts are saying that it may try to reach 1660 as long as it hild 1584 now.

Regards,

Praveen Kumar