17 July 2013: Nifty Elliott wave analysis: I have no great hope from cosmetic reforms. Market will choose its own dynamics. It will have support at 5910 and stiff resistance 6040.

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

For 17 July 2013: -

On 16 July 2013, FII Sold INR 357.40 crs and DII Sold INR 210.55 crs

FIIs are making exit from slower pace than compared to June month. It is not new to note that major big money is exiting from emerging market to an extent. Indian market is not in worse condition in term of money flow although Indian rupee has much bigger weakness. We have seen rise in Indian stocks against all add. Now, RBI gave a huge disappointment with a hint for rate hike. Recent steps are beyond my understanding. I strongly condemn any such steps which give a hint to compromise with growth with GDP nearing at 5%. This kind of steps can do irreparable damage and trigger massive slow down.  

Government of India gave nod to hike cap in 13 sectors. They hiked cap to 100% in telecom sector. Market may want to react or may not want to react. I said earlier also when they allowed FDI in retail last year that these are cosmetic reforms. I views remain same that these are cosmetic reforms. Tell me one thing how many dollar we got by allowing FDI in retail? I knew this to happen. It is not that foreign money is sitting with a line to come in India. We must need to improve economy and business environment first then only those steps can be effective.  

Technical charts are advising caution as long as Nifty stand below 5980. I said for two supports yesterday, one was at 5960 and another was at 5910. It fluctuated in that range with respect for 5910. I still feel that this market should not fall to any threatening levels. Only thing is that it needs to stand above 5980 to ease those fears of fall. Banking stocks are just turning hopeless.

Strategy for Nifty July future – SGX JULY NIFTY is trading dead flat ignoring all steps taken by government of India. If it manages to stand above 5990 then we can see the levels of 6040-6050 again which the next trigger for rise is. Technical support will emerge at 5940-5930 levels only. It is expected to be a dead day to trade.

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.

A pause was expected with some price correction or time correction. Correction length so far is from 1684 to 1672 which is acceptable. I feel that it may give some more pullback but 1655 should not break now. I feel that it is just an expected pullback before another massive rally. This pullback will end today or tomorrow only.

Regards,

Praveen Kumar