25 July 2013: Nifty Elliott wave analysis: When world is on monetary easing, India fears for monetary tightening. Technical support for Nifty is at 5960 and then at 5910. Wild expiry ahead.

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

For 25 July 2013: -

On 24 July 2013, FII Sold INR 404.50 crs and DII Sold INR 328.80 crs

We have derivative expiry for July month series today. RBI added fuel for bears in this market which has brutally crushed banking and financial stocks. We need to be clear that RBI is giving hint for rate hike. The way recent steps come I am sensing for either CRR hike or repo rate hike or both. It is just not making sense but this is reality. It is my personal view that D. Subba roa become worse RBI governor of my life time.

Technical charts are suggesting that it has already broken the trend line of rising pattern. It is giving me resistance in the zone of 6020-6035 levels. Above 6035, I will expect for short covering on derivative expiry day.

In the down side we can expect support at 5670 levels. If it breaks then it can give 5940 to 5910 levels. Clearly, when rate hike fear comes then technical will go at back foot. So far, Indian market has shown great resilience. Situation will be worse if global correction begins.

We have a chance of rebound after gap down opening.

Strategy for Nifty July future – SGX JULY NIFTY is down by 40 points. There are chances that we will see opening near yesterday’s low. If it breaks 5970 then this market will find it tougher to rebound. Unfortunately, sentiment is worse on derivative expiry day. Only short covering rebound can help bulls. Real my intraday updates for more details.

S&P 500 – It corrected in the last trading session and came at 1685 levels. One needs to see for the support at 1675 level. Break of 1675 will give 1660. I still believe that after this pullback S&P 500 will rebound strongly to cross 1700 levels. It is better to see the pattern of strength to emerge which can either come at 1675 or at 1660 levels.

Regards,

Praveen Kumar