06 August 2013: Nifty Elliott wave analysis: Death cross over should be reality by this week only. A bounce deserve in the market but no bounce is sustaining due to adverse fundamental developments. Last support 5649-5600.

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

For 06 August 2013: -

On 05 August 2013, FII Bought INR 33.35 crs and DII Sold INR 303.13 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.

I need to add the possible impact of this death cross over. It can do as bigger damage as 20%. Yes, Nifty is at 5700 and generating a possibility of 20% dip in long term. I can equally say that no other global index has any such development. Damage may be lesser as it is not a global phenomenon. Why I am saying this? Development on S&P 500 is giving me a hint of long term move towards 2000 (means 20% higher from current levels). Nifty down 20% and S&P 500 up 20%, both cannot be true together.

Yesterday, after market we came to know that NSEL problem is still far away from any solution. It was not the only bad news. EDUCOMP and ORBITCORP are also facing problems. If you remember, I have warned last year itself from investing in these companies.

Technical charts are still suggesting that 5650 will act as strong trading support in any down side. No great hope unless Nifty stand above 5750. One need to note that 5600 levels also has technical importance in term of support.

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 with a dip of 25 points. It means that it will start below 5700 levels. This is painful for traders. Charts are saying that break below 5690 will give us 5660-5650 levels which is last support. Any further break will cause 80-100 points of further damage. Hopes of recovery are moving away day by day. Tough –tougher days ahead for Indian market.

S&P 500 – I do not think that we should change our analysis. It was dead session yesterday. I still feel that S&P 500 will try to acquire 1720 by this week itself. Technical charts are suggesting for support at 1700-1690. I am still expecting for 1720 levels.  Things are much better in US than India. Bulls are still controlling those markets.

Regards,

Praveen Kumar