08 July 2013: Nifty Elliott wave analysis: Nifty is likely to take support at 5800 – 5770 levels again after gap down. Expect intraday recovery. It needs decisive crossover of 5906 to see further gain.

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

For 08 July 2013: -

On 05 July 2013, FII sold INR 15.71 crs and DII bought INR 105.27 crs.

FII money flow is still negative but some reduced intensity. They bought for just one day in July month so far. Our market has two negative factors, one is FII Money flow and other is Bank Nifty. We saw weakness in Bank Nifty form the day when market turn pessimistic about rate cut. Both are interlink now and Indian market desperately need a rate cut. It must be one man decision and I have no hope from that one man. If weak Indian rupee is fresh excuse then it is only RBI’s duty to take essential steps.  

European markets were in big sell off on Friday night on political concerns in some part. US market rebounded well from its intraday low point. It is important to note that major US indices have closed above 50 days moving average. It is suggesting for a major run away rally ahead.

Technical charts are suggesting that as long as Indian market is above 5800 levels, we can hope for higher crosses. I have already said this earlier also that the next crucial levels are 5900-5906. Cross over of 5906 will trigger fresh wave of rise. As long as we are below 5900 we can expect choppy moves before crucial crossover. This can be irritating waiting but traders has handful of choice.

For Indian market, Banking and metal stocks have refused to recover. Those are extremely oversold with positive divergence. Will that ever recover? Believe it, it’s the weakness of Indian rupee is hurting stocks price a lot.

Equally, I heard that we can expect some major reform announcement this week by finance minister.

Strategy for Nifty July future – SGX JULY NIFTY is down by 45 points and trading at 5827. It is showing washed put trade due to weakness in Hang Seng and giving up trades on Nikkei. I can say that whole Asian market is trade against US market cues. Technical charts are suggesting for support at 5820-5800 after that gap down, if comes. I am expecting intraday recovery on Nifty. It is looking like phase of consolidation before breaking 5900-5906 levels.

S&P 500 – Current formation is giving a hint that S&P 500 will give a new all-time high by July month itself or by first week of August.

I have already stated for Friday that we will get a cross of 1624-1630 ranges. It was negative one time and then took intraday shoot up. Initial, it was bad news as good job data. Anyway, technically we got close above 50 days moving average. This is showing that next range for S&P 500 is giving to be 1660+ which is almost 2% from here. It is looking to move way higher. May be 1700 is also in waiting for S&P 500 this time.

Regards,

Praveen Kumar