14 October 2013: Nifty Elliott wave analysis: Expect a possible pullback before fresh up move now. Confirmation can come only below 6060, so far not a compulsion. Technical resistance is at 6120.

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

For 14 October 2013: -

On 11 October 2013, FII Bought INR 1010.45 crs and DII Sold INR 544.19 crs

Traditionally, FII has bought it heavily near 6100 marks. I have given the levels of 6100 from past few days when rise begun from 5700 levels. Now, we are at a zone where we can expect a pullback on some profit taking. Based on technical charts, it is still not going to be a compulsive move.

After market, we got August month IIP data. It came at 0.60% versus 2.80% in July. Market was expecting something near 2.50%. So, what is new in this? IIP is known to give surprises and mostly on negative side. It is not even rebounding in base effect. This is a failure of policy makers which has probably discounted by market long back when we saw fall due to weak currency.

I am more concerned as US shut down is extending longer than expected. I quoted last week too that it may extend more. We saw good technical recovery in US market in past two trading sessions. Some correlation is suggesting that trouble in US market has resulted some opportunistic push of money towards nation like India.  I can give on mark, keep an eye on 6060. If it starts trading below 6060 then pullback can intensify. Remember that India VIX is coming near to the support of 23 which is almost lowest in past 2 months. Over all, it is not as weak as feared but pullback cannot rule out.

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Strategy for Nifty October future – NIFTY future is going to see some flat to negative opening as SGX Nifty is trading with a loss of 10-12 points. Keep your eye on 6080. A break below 6080 can give confirmation of pullback. It will have resistance at 6150. I am not expecting any big pullback as of now. At some point on downside, I will turn a buyer but I need to wait for such trading signals.   

 S&P 500 (USA) – I said for a possible technical recovery wither from 1642 or from 1623. We got an optimistic recovery from nearer to 1642. Now, we can understand that it was just on hope. Market needs a solution of US shut down. Right now, S&P future is trading with a loss of 13 points as nothing came positive on weekend. So, very obviously a possible dip is coming now. It is just unnecessary trouble which market needs to bear. Below 1692, it can hit 1680 and then same downward targets will be applicable.

Regards,

Praveen Kumar