16 December 2013: Nifty Elliott wave analysis: Once again keep your eye on 6150 and 6080 as meaningful support. Better confirmation to buy will come above 6230 levels. It is oversold in short term.

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

For 16 December 2013: -

On 13 December 2013, FII Sold INR 432.02 crs and DII Sold INR 42.07 crs

So, FII sold in cash market on Friday. Just the way I said this many times that FII are known to buy tops heavily and sold bottom heavily. They bought Rs 2500 crs on top, if you remember. Money flow is something which cannot give you true picture for trading. That’s why you should believe technical analysis to trade.

I am expecting soft opening and trades before critical events are in line. We have Fed meeting and RBI policy this week. I expect 6150 and 6080 as most critical support on year end. Market is almost looking over sold in short term. We may be on the verge of a trading bounce but signal has yet to see confirmation.

When I say about confirmation then I am indicating for the formation of some positive divergence on main momentum and technical indicators. I still warn that before recovery it may try to give a panic to the traders. I booked all my shorts on Friday’s dip. Now, I am waiting for fresh signal to build my trades.

Just two figures to watch as supports. One is at 6150 which is closer. Once it breaks 6150 then it may open move towards 6080. Note that a move towards 6080 does not mean the test of 6080. Better confirmation for recovery will be only above 6230 which are too far.

Be caution on banking and reality stocks as those may remain nervous.

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

Strategy for Nifty December future – NIFTY future will open soft today. Immediate trading support is at 6160 levels. If it breaks 6160 then there is nothing to test for recovery. If it sustain above 6160 then we have some meaning to think for bounce. I will update more during trading hours. Break of 6160 may give us some panic sell off but those may be opportunity to buy. I want to dip and more dip to buy from low.

S&P 500 (USA) – We are on another critical week for US market as fed will take decision about tapering. S&P is sustaining below 1780 which is definitely an odd sign for bulls. I suggested for short from failure of 1813 and still retaining my views. As long as it is staying below 1780 we have meaning to hold short. It is expected to enter in the range of 1750 to 1740. It is not the market for light traders. Maintain distance if you cannot afford the risk of volatility.

Regards,

Praveen Kumar