27 August 2013: Nifty Elliott wave analysis: Nifty is expected to get support at 5400 to 5380 levels. It may recover from its intraday low but this recovery may come in second half only.

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

For 27 August 2013: -

On 26 August 2013, FII Sold INR 607.43 crs and DII Bought INR 409.99 crs

India is under an untold financial crisis. Our rupee is losing its value and there is a further scope of further depreciation. Firstly, government of India has not done anything for years and now they are doing all such things to add further damage. Welcome to ‘Food security bill’ and its political ambition. I am not against this kind of bill but I am against the timing of this kind of bill. I am not talking about political timing. Clearly, I feel that our economy is in the state where government should “cut out” its expenses rather than adding more subsidies.

Market is ready to react with it. You can just hope that damage should not be too big. I am expecting pressure on banking stocks again. Market is already discounting many big negative factors. I feel that this market has shown great relative strength while economic fundamentals are so poor. Believe me that even 5400 Nifty is also a big achievement.

Technical charts are not so hopeless. We are just two trading sessions away from derivative expiry. It will add further volatility. Only logical technical support is at 5400 levels. An initial dip is expected today and then it will follow recovery in second half of trading. When I am saying recovery then I do not mean for banking stocks. Keep your eye on Indian rupee and NSEL issue too.

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

Strategy for Nifty August future – Firstly, it will be 50 points negative start. Then one can expect trading support to emerge at 5400 to 5380 levels. It is not easy to decide about further move because it will depends on many event which will occur during trading session only. It may give a shock to traders before expiry.

S&P 500 – It has a likely target at 1670 levels which it has almost tested yesterday. We saw a pin point fall from 1670. It makes the range wider. Expected range for trading can be from 1640 to 1670. I still feel that S&P 500 has formed a pattern which can result significant weakness in US market. Yesterday’s higher opening was looking as perfect place to initiate shorts. Remember, even DAX has resistance at 8450 levels.

Regards,

Praveen Kumar