05 August 2013: Nifty Elliott wave analysis: Possible rebound is coming after hitting 5650 levels. It is still a challenge for market to sustain with rebound. Scary reverse golden cross (death cross) looks possible in few days.

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

For 05 August 2013: -

On 02 August 2013, FII Bought INR 283.79 crs and DII Sold INR 340.60 crs

Highlight of this week can be a possible ‘death cross’. It is simply reverse of golden cross over. It means that now 200 DMA will get a cut of 50 DMA from higher side. Refer to the chart. How important is this? Let us see when we saw ‘golden cross over’. It has happened on 30 July 2012 when it was just above 5100 levels.

Why it is so scary? Firstly, when almost all global indices are on either at 52 week high or at lifetime high, we are getting this kind of possible crossover on Nifty. I am still saying that it is a possibility, it has not done yet. We may see a technical bounce before fall. I have already said earlier that if we have to touch new all-time high then it must be in the July itself which has failed.

Technical charts are still suggesting that 5650 will act as strong trading support in any down side. I gave this level in advance on my intraday updates yesterday. We are going to see a higher opening today. I bought the dip on Friday looking on bullish RSI divergence on hourly chart. No great hope unless Nifty stand above 5750. Keep your eye on Indian parliament also. Expect lots of unexpected drama as usual. If we are going to see death cross over then whole blame has to go on government of India and Indian political and parliamentary system. Do not blame FII. Now everyone has to pay for ultimate policy paralysis.

Visit again to read my intraday updates as I can update about those only during market hours.

Strategy for Nifty July future – SGX AUGUST NIFTY is trading higher by 45 points right now. It is looking to be in favour of my position at least for initial minutes. Any failure below 5650-5670 will be decisive for Nifty august month future. It is going to happen sooner or later. Rise is coming due to the effect of positive divergence of hourly chart. It is likely to open at 5740. Support will be at 5715-5700 after opening.

S&P 500 – It has opened weak on Friday but closed on strong note. It is giving a hope for fresh hope for a higher test near 1740. Now, I am feeling that we are going to see a high in August month itself. We have a great possibility to make another short term top by this week or early next week. I am expecting this top to form either at 1724 or 1745 levels. It may be few points here and there. I am still warning, there is no possible topping out sign yet. I cannot advise shorting unless it gives some pattern with such hint.

Regards,

Praveen Kumar