07 October 2013: Nifty Elliott wave analysis: Technical support is at 5880-5840 levels. We need to move above 5980 to bet for next leg of rise. It is more like hopes than to be a trading signal.

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

For 07 October 2013: -

On 04 October 2013, FII Bought INR 541.36 crs and DII Sold INR 302.07 crs

Nifty closed with a gain of 1.30% last week. It has seen a strong rebound from lower levels. It has faced resistance at 5950 levels. Technical charts are suggesting that Nifty can face stiff resistance in the zone of 5950 to 5980. We can expect a fresh up move only if it manages to move above 5980.  

I have already shown my concern towards US shut down. The great US political drama continues over weekend too. Now, I am not expecting solution to come sooner. This can hurt global sentiments and global recovery data too. I take this as a signal that it cannot be possible to rollback stimulus sooner. We cannot be happy about it. Indian software companies may feel troubles. On other hand some alternative money may come to countries like India.

Technical charts can gain further momentum only if it can able to surpass above 5980 which is going to be a big challenge. Caution must be advisable at this level. Asian indices are trading with some softness. In the down side, we will get two important supports. One is at 5880 and next is at 5840. I can hope for a rise above 5980 but not too confident. Remember, I always say that the levels of 5900-6000 used to give confusion.

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Strategy for Nifty October future – SGX Nifty is hinting for flat opening. We can now expect another wild swing. It can generate support in the zone of 5920 to 5900. Critical resistance will be at 6020 levels. So, it is almost 100 points range. We can hope for rise but we can get better signal during trading hours only.

S&P 500 (USA) – I said that as long as 1670 hold we can have some hopes. I was right but unable to close above given threshold of 1692. It just turns shy by 2 points. Problem is that right now future is trading with a loss of 8-9 points. It needs to make fresh attempt to cross 1692. My worry is that US shut down continues. US politician can burn their economy with both hands. Now it is looking like solution will not come sooner and easier.  

Regards,

Praveen Kumar