21 October 2013: Nifty Elliott wave analysis: We may expect all-time high but we are heading towards a correction. RSI is giving negative divergence. Do not jump with big money. Resistances – 6240 < 6300 < 6360.

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

For 21 October 2013: -

On 18 October 2013, FII Bought INR 1752.98 crs and DII Sold INR 562.23 crs

It was not unexpected 6200 this time. FIIs are still pushing heavy money. I am still saying, it does not matter if top comes at 6120 or 6200 or 6300. In percentage term, it will be nominal difference. I can easily trade for intraday for those rises but money is not safe at higher levels.

RSI was at 69.06 on 19^th September when Nifty hit a top of 6142 for a fall towards 5700. Now Nifty hit a high at 6201 and still looking to advance more, value of RSI is 67.21. This is negative divergence.

India VIX came at 20. It has stronger trend line support at 18.50. I am more concerned looking on CBOE VIX which is running near 12-13. US market makes most top when CBOE hit near 12. Very soon, a short term top will emerge there and correction will begin. Equally, it looks like India VIX can hit max 18.50 before moving higher. I can still state that if it breaks 18.50-18.00 then I will just expect 13-12 levels for India VIX too. In that process NIFTY can hit higher by 6600 on Nifty. Will that be the case? Well, that looks very los possibility for me.

In short, Monday, Tuesday or Wednesday, a short term coming. Now, it can be at 6240 or 6300 or even may be nearer to new all-time high at 6360. I would rather be very happy to see 6360. I traded long till Friday but not came home with long position. I am less intended to carry trades to home for few more days. Note that I am not claiming for new all-time high, it is just my excited optimistic thought of a hardcore bull of past few weeks.

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

Strategy for Nifty October future – NIFTY future came 6224 as top on Friday. I hold my long till 6210+ but refuse to carry long on weekend. These were updated on my ‘Intraday updates’. Now, we can see advance towards 6240-6260 for intraday but a dip is very near to me. I suggest readers to visit my intraday updates as we need to see hourly chart updates. Very obviously, Nifty future can see some more upside if momentum continues. We are just odd 2.00 to 2.50% away from all-time high.   

S&P 500 (USA) – I was expecting 1742 but it has surpassed those and came at 1745. It is uncharted territory so it cannot be easy to spot out with exact levels. Now, technical analysis cannot bind you in levels. It is giving a view. A view which is saying me, “Stop doing long” as it can see crash anytime. 1760 is a possibility before top but I will sit sideline. I have “no single reason” to say for a dip in stock market but charts are saying so. Reasons will come later on. CBOE is running at 12-13. Convert all your stocks to cash. I am running with long on Gold and this will be my only long deal.

Regards,

Praveen Kumar