17 October 2013: Nifty Elliott wave analysis: Another dead day is expected. I like to see market reaction after KM Birla named in FIR on COALGATE Scam. Technical resistance at 6160.

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

For 17 October 2013: -

On 15 October 2013, FII Bought INR 1136.23 crs and DII Sold INR 1035.34 crs

Nifty almost remain at same point for third day in a row. It is just trading here and there near 6100 levels. FIIs are buying heavily in cash market from past three days. I always believe that FII used to buy the top heavily. They are doing same things this time too. Charting is suggesting for a pause and we got that. I need to add that we are still away from a possible threshold point for pullback.

I like to draw your attention towards one event that took place after market hours. CBI has launched a FIR against KM Birla in Coalgate scam. This can spread panic amongst corporate. Who is wrong and what is wrong that we cannot know but definitely it is a sentiment dampener. I like to see market reaction for today. In my view, it can hurt many stock prices who were dealing with coal field in India.  

Technical analysis is still suggesting some kind of top can emerge nearer to 6120. I am considering the decisive resistance at 6160 levels. We have a bright chance of moving higher again after a profit taking but that is too early to conclude. If drop comes with some disappointing news flow then ‘rise after fall’ will be delayed.

Equally, today it decisive day for US market in terms of technical and in terms of fundamentals too. Will S&P 500 able to surpass 1730. I do not know but I know that 1730 is a decisive level now. Failure will invite big sell off. Worry over US shut down is over and so it needs a new trigger.

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

Strategy for Nifty October future – NIFTY future is going to see a flat opening as indicated by SGX NIFTY right now. Technical support will emerge in the zone of 6070 to 6050 levels. On higher side 6180-6200 will be decisive resistance. It is very clear that range to get direction is bigger but this generally happens after sharp moves. I am taking this as a sign for pause and it will continue. It will favour bears once it starts trading below 6070-6050.

S&P 500 (USA) – I said for rise as long as it holds 1692. It is still holding and generating the expected wild move after worry over US shut down. Now it is just near to its previous all-time high. Logically, 1730 will be a resistance and a decisive point too. Have a look at MACD on daily chart. Three tops come with drop on MACD top. This is challenging. Now it is goes above 1730 then there cannot be anything to worry but if it fails then a real big and brutal sell off will start anytime. Note that I am saying for drop which needs just 10 point of stop loss. Let us see.

Regards,

Praveen Kumar