07 August 2013: Nifty Elliott wave analysis: It gave death crossover and ended with a massive bloodbath in Stock market. Next support can emerge only at 5450 levels unless we get a gap up and sustain which is tough in these days.

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

For 07 August 2013: -

On 06 August 2013, FII Bought INR 212.74 crs and DII Sold INR 323.74 crs

Above data is not showing the pain of fall in stocks market. Neither Nifty is showing complete pain of fall in equity price. Metal stocks are on multiyear low and many banking stocks came at the lows which it has seen when Nifty was at 4600.

It is fundamental churning with negative biasing. I was sensing this that we have to pay for policy paralysis at some point. Many sectors are giving the dip. We saw few downward revision of GDP forecast. Is the situation really so bad? Well, situation is even worse than what stock market is showing. We may get technical bounce in stock market due to cyclic nature of price phenomenon but there is no hope of improvement in the fundamental. Do not expect things to improve in rapid way at least for one year.

We got just one positive news that Dr. Raghuram Rajan will be next RBI governor, perhaps he is best man for economy and market as well. Good news is that we are going to get rid of current RBI governor.

Technical charts are saying that break below 5520 will give us levels of 5450 also. So for today, it is compulsion for market to respect 5520 to show even a single sign of recovery. Next critical point is at 5580-5584. Crossover above 5584 can give some sort of pause in fall but this cannot be easy.

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 with 15 points gain. It must be Raghuram Rajan effect. Technical support for Nifty future is at 5550 – 5540 levels. Break below 5540 will again spread panic in market. It may test 5480-5460 in panic. It needs to stand tall above 5610-5615 to say that we can get a pause in fall. Let us see the impact today.

S&P 500 – A close came below 1700. OK, on charts nothing great has changed but surely a sign of caution coming for bulls. I exited my long and will wait for this pullback to get over. I was betting on 1700 from long time and I have extended the target for 1720 but it was just looking like ambition of bulls. I am expecting support to emerge at 1680-1675.  

Regards,

Praveen Kumar