03 July 2013: Nifty Elliott wave analysis: Nifty is taking pause after sharp 350 points of recovery in just few days. A likely pullback is coming and it can get support at 5826-5800 levels. A dull day expected.

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

For 03 July 2013: -

On 02 July 2013, FII sold INR 43.20 crs and DII bought INR 125.33 crs.

It is looking like FII has no conviction for this rise. Two important factors are still not supporting market. One is FII data and other is banking index. I am equally concerned for both. Limitation in rise was coming due to same reasons. We should see some policy related announcement to both factors supportive.

India VIX has a high at 22.11 levels and now it is coming near 18 levels which was earlier acting as resistance. So, market might see some limitation in rise as long as VIX is spending time above 18. We should watch mid cap and small cap indices too to conclude before next move. It is equally important that participation should be broad enough to see any big move from here.  

Technical charts are suggesting for the support at 200 DMA which is at 5826. Break below 5826 may give us 5800 levels too. I am expecting a correcting day with negative biasing. It may have majority of move coming in the form of gap down. For short term, we will have a strong base formation at 5700 levels which is not going to be broken.

At some point and at someday FII will buy this market. It can be concerning if it is not coming sooner. Let us see what is coming today.  

Strategy for Nifty July future – SGX JULY NIFTY is down by 35 points. Banking stocks has not participated again and hence rise is getting its limitation. Technical charts are suggesting for support in the zone of 5820 to 5800 levels. On higher side, we at least need to see trades above 5875 to get any further rise. It is not going to be great day for bulls. It is ‘under consolidation’ and next move is likely to come after this consolidation.

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”.

It hit my resistance of 1624 as dot and corrected again. It is correcting in term of price and time too. As long as S&P 500 is above 1600, there is no point to worry. MACD is emerging to give a buy now. Somehow I feel that we should see a move above 1620 to bet for next up move towards 1660 levels.

Regards,

Praveen Kumar