19 December 2013: Nifty Elliott wave analysis: I see FOMC minutes as ‘negative’ for emerging market like India. Caution advised if topping out pattern comes before 6300 of Nifty.

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

For 19 December 2013: -

On 18 December 2013, FII Bought INR 1198.60 crs and DII Sold INR 413.01 crs

Firstly, it is the time to congratulation to Dr. Raghuram Rajan that he at least dares to think in positive way. I do not know if it is a courage or adventure. Only time can answer. Honestly, I was not expecting this kind of decisive.

He left the words of caution too by saying that he may act before policy. So now he made the things still jittery. I will fear on every day whenever data comes. Our country is heading towards election now and so RBI may not get good support from government. So we are still far away from improvement in growth but some hopes may come if this works.

Now, let us see what has happened in US last night. The Federal Reserve announced Wednesday it would start to taper its aggressive bond-buying program to $75 billion a month beginning in January, propelling the market to a record close. The FOMC also announced it would lower its monthly long-term Treasury bond purchases to $40 billion and mortgage-backed securities to $35 billion a month, both reductions of $5 billion.

Well, it may be good news for USA but it may not be as good for countries like India. I am expecting a stronger opening but not as strong as USA or Japan or any developed market. I am adding a warning sign. Suppose if closing comes near to day’s lower levels then it will develop an odd pattern. Logical resistance is at 6280-6300-6320-6350.

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

Strategy for Nifty December future – I am expecting only 40-50 points higher opening at the max. It may open weaker than what SGX will give us at 9 am today. 6300 may act as still resistance although if momentum sustain above 6300 then we can expect levels like 6350 also. Recovery depends on follow up buying. Technical support is at 6260 and 6220 levels.

S&P 500 (USA) – FOMC gave a cheer mood to the global market. S&P was fluctuating near 1780 before decision and then took a sharp bounce. Finally, it closed at highest point of the day at 1810. It is just 4 points away from another all-time high. I highlighted this in past also that if it breaks 1814 on higher side in December month then expect a wild move towards 1854 levels which is indicated by gann resistance line for December month. It is the time to forget yesterday and think about today. One must watch for 1814 to add fresh long. I cannot deny the possibility of “Blow up top formation”.

Regards,

Praveen Kumar