29 August 2013: Nifty Elliott wave analysis: Expect short covering on derivative expiry day. Nifty can reach as high as 5400 too. Welcoming RBI step as they corrected their “BIG MISTAKE”. Please do not commit this again.
You must
read previous articles and watch the given chart carefully to understand this
article completely.
For 29
August 2013: -
On 28
August 2013, FII Sold INR 1120.43 crs and DII Bought INR 506.78 crs
First big
news for this morning in my view is this – “RBI opens special window for forex
purchase by oil companies.” The PSU oil companies are the biggest buyers of
dollars, requiring USD 8-8.5 billion every month for the import of an average
7.5 million tonnes of crude oil. The RBI decision is aimed at curbing volatility
in the forex market.
Take the
impact – Rupee will open this morning with great strength, may be near 67
levels. This was much needed step and I quoted about this step earlier also as
solution. Next question is who has thrown oil companies to open market for
buying dollar? Well, it was our present RBI governor. This is what I called as ‘policy
error’. Readers should conclude themselves. I can say that Indian rupee will at
least not going to be volatile for intraday from today. I still need to see if
RBI is too late for this step.
My condition
and concern is 10 year Bond yield. Thankfully it saved 9 and gave me reasons on
technical charts too to buy equity.
As quoted
in the chart, you can see that length of wave ‘c’ elongated towards 5118 which
was turning equal to wave ‘a’. Wave theory suggests that whenever this
condition occurs then ‘a bounce’ deserve. One must focus on RSI too. We added
long when NIFTY was at 5150. It was the moment when 99% traders were extremely
pessimistic. It was the time when IndiaVIX was shooting 36. (I have a
suggestion for NSE, please open VIX for trading).
We have
derivative expiry today and I am expecting short covering. My expiry target is
near 5400. Let us see. Nothing cost me from expecting as my buys are from
extremely lower levels. Remember, I am bullish on metal stocks and pharma
stocks only.
Visit
again to read my intraday updates as I can update about those only during
market hours.
Strategy
for Nifty August future – SGX Nifty is
trading with a gain of 25 points right now. It is giving me a hint for higher
start, may be above 5300. Technical charts are giving me a hint for support at
5260 to 5240 levels. Stabilizing rupee will force bears to cover short. If short
covering comes on expiry day then I can expect 5400 too. Are you expecting
4800-4600-4500??? (all in a month?)
S&P
500
– So far, 1627 and a bounce. This is what I gave as a road map. Now fluctuating
in the range of 1625 to 1640 will not give trades. I can short this only if it
breaks 1618 in decisive way, leaving odd 8 points on table. On higher side
also, I need to a cross above 1642 to think about long. So, I have no trade on
US now. Let us wait and watch.
Regards,
Praveen
Kumar
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