20 September 2013: Nifty Elliott wave analysis: All eyes are on new RBI governor. Will he give more rises or a final top? Resistance is at 6160 and support @ 6040 for Nifty. Expect another wild session.

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

For 20 September 2013: -

On 19 September 2013, FII Bought INR 3543.84 crs and DII Sold INR 1829.72 crs

Look at above buy figure by FII. This is called a typical FII buy near top. Do you remember that when Nifty was near 5200 they were selling massively? I can only say ‘best of luck’ to those FII.

Now, let us talk about today’s monetary policy. I can say that Dr. Raghuram Rajan is most lucky man on earth right now. He became RBI governor 15 days back and most of his so called challenges are automatically solved. Indian rupee appreciated by 10% or more and all of a sudden from nowhere fed chairman Ben Barnanke changes his mood on tapering.

Now question is will he deliver today what market wants and expects. I feel that this is probably the best time to be brave and focus on ‘growth’ which was just second priority in past many years. RBI governor has to give something for growth.

If 6100 on Nifty came so fast then main reason is that market is strongly expecting that current RBI governor will give something positive on this monetary policy. It is only expectations and hopes which has changed in past 16 trading sessions. Rest other factors remains same. I am not expecting repo rate cut. I am expecting that he will remove those restrictions which former RBI governor put to give strength to Indian rupee. He is supposed to remove restriction on CRR too.

Technically, this rise has almost over done by 100-150 points what I had expected. My wave analysis is suggesting that we are in final stage of fifth rising wave. We have high possibility that RBI may give final top of the market. Government of India of got garden of opportunity to control its fiscal deficit. I need to be clearer; we have three months to do. Now, coming three months will decide the fate of Indian economy.

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

Strategy for Nifty September future – Nifty future is likely open flat. All eyes are on RBI policy. I feel that market has discounted most positive by RBI to come. I can able to quote only one level. If it breaks 6060 in the downside then only we can see some decisive pullback. If not then also it will see pullback from higher levels. One need to note that we are going to see derivative expiry next week.

S&P 500 – A pause at 1730 is generating challenging hourly pattern. It is too early to say for final top but here we have possibility to address this as final top. I can able to get confirmation if it closes below 1710 without giving 1730 in reality. I am not overexcited with fed move.

I am not comfortable to say that pullback will not come. It should come and it will come. Only question is when and from which point.

Regards,

Praveen Kumar