18 January 2013: Nifty Elliott wave analysis: Market need to feed with good new to move higher. Partial deregulation of diesel price was one such news. Cross over of 6068 will give 6084-6100.

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

Today’s outlook: -

On 16 January 2013, FII bought INR 564.20 crs and DII sold INR 578.19 crs.

It was another set of reform where government of India has announced ‘partial deregulation’ diesel price. Bulk buyers will not get any subsidy on diesel price from today onwards. This news makes the market from to exciting. It was good news but it brings a bad news too. There is a fear of rise in inflation. So where oil companies were on fire, banking stocks were on fall.   

Indian indices are not as strong as rest other Asian indices in spite of reforms announcement, hourly technical chart is suggesting for a strong opening and stable first half. It is giving me a hint that it will see a second half selling or profit taking from higher levels. This level can be at 6068 or 6084. In a extreme case it can be 6100 too.

On daily chart we have ‘negative divergence’ on MACD which is still continuing. There is a upward channel which has saved the lower band of upward channel every times in recent days. I am still saying that this market is running near to short term top but top might not have formed yet. I am not in hurry to conclude anything as top yet.

I have highlighted 20 days exponential moving average as decisive support. Now it is at 5965, which is still looking too far for today’s trade. Until we start closing below 20 EMA for 2-3 days, we cannot say that this market can see remarkable profit taking. One should watch the mid cap stocks and indices carefully as those has started a phase of under performance.

Do remember, “Correction will come the day when least number of people will expect about it.”

Strategy for Nifty January future: It is loosing premium with rise in index. We have started month with premium of 60+ points but not it is only 12-13 points, so almost a percent has lost in premium. Technical charts are saying that we may not be near to recent high of 6096 levels. It may open near to 6070 and then may try to attempt towards 6096 but may not cross. In the second half, we can see tradable moves. Short in post 2 pm trade with a stop loss above days high till that time.           

S&P 500 – It was tired near 1475 but yesterday it has crossed ad close above 1480. is it changing anything much. No, I have already said that it may move towards 1500 but use all such rise for short and short. I do not know what will come to top this rally but something will come. We have seen almost 10% rise from recent low of 1345.

Regards,

Praveen Kumar