26 November 2013: Nifty Elliott wave analysis: We are close to expiry and VIX moved by 5% yesterday. Expect pullback again. Key support will be at 6050 levels only. Avoid long at higher levels.

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

For 26 November 2013: -

On 25 November 2013, FII Bought INR 837.80 crs and DII Sold INR 743.82 crs

Have a look at the fall of past three trading days. It slipped from 6212 to 5792. Now in just one day it has covered 62% of the fall. These are rapid and wild swing. On Friday VIX was down by 5% and then we saw Nifty running on Monday. Now, on Monday VIX is up by 5% and it is hinting for a pullback again.

European and American market hit its fresh new 52 week high again. This is long phase of underperformance in Indian market. If global market goes on profit taking then situation can be concerning in India. I quoted many times that we can be optimistic buyer but cannot rule out the odd outcome.

For today’s trading 6140 is likely to be a stiff resistance to deal while market can slip to test the support of 6050 or nearer. We are in derivative expiry week now and just two days away from November month expiry. If things goes wrong here then we can expect derivative expiry going on lowest point of the month.

Although we are 2% away from 5970 but I still like to add that if it breaks 5970 then one must unwind all long trades. It can result fall towards 5850 and then towards 5700 also.

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Strategy for Nifty November future – NIFTY future may give up some premium again as hints are coming from option market. It is likely to see that December month series will also give up major part of premium. Technical support will be at 6090 levels. Break of 6090 will give it a move towards 6070 and then 6055. Note that 6055 will be final support and break can cause panic sell off. On higher side 6140 is a resistance. Although on the cross it can add 25-30 points more to come near 6170 levels.

S&P 500 (USA) – It has started year at 1426 and now almost sitting with gain of almost 380 points. It has to stop some point for correction. I still consider that as long as it is staying above 1790 it will avoid all such possible signal for profit taking. We may see some year-end profit taking next month. Due to long negative divergence every silent day makes me cautious from long. In all, resistance at 1813 and support at 1790.

Regards,

Praveen Kumar