You must read previous articles and
watch the given chart carefully to understand this article completely.
Today’s outlook: -
On 22 January
2013 , FII
bought INR 1046.40 crs and DII sold INR 855.35 crs.
Looking above figures, one can say
that FII are still finding Indian market attractive. There is no denial that
nifty is hitting crucial resistances on daily basis. Yesterday it hit
resistance at 6100 marks. We have seen reactions at higher levels and Nifty
came lower to hit 6040.
Crossover of 6068 had generated
target of 6100 but I was not very confident for crossing 6100. A fall from 6100
might be the first indication of some fall. My focus will be at 20 EMA. I am
mentioning and plotting 20 EMA on my charts from past many days. As of
yesterday’s closing, 20 EMA is at 5990 levels. Current up wave can reverse only
if we see two closes below 20 EMA.
I have no idea at all about the
reason for price correction. Charts are suggesting that we might be forming
top. We cannot conclude anything from just one day of intraday fall. Question is
that we will we get follow up in selling? If yes, then it may try to come near
to 5990.
Based on wave theory, we are on
fifth wave progression. Now, there is a big problem in this fifth wave. It is
running with negative divergence on crucial technical indicators like MACD and
RSI. This weakness of technical indicators is giving all signs of uncomfortable
moves.
There were some reports that
unemployment rate will be highest in the year 2013. We have some selling in
global market when we were trading but those have recovered to a good extent in
night hours.
One more thing, RBI may not go for
50 bps repo rate cut looking on inflationary environment. This can be disappointment
for market but market is not discounting this yet.
Strategy for Nifty January future: I said yesterday that you can
expect the test of 6060 unless we stand tall above 6111. It hit a high at 6109 and
then we all know what has happened. For today’s session also technical levels
of resistance will emerge only at 6111. It need to be a wild day and perhaps
majority of reactions will come in second half. Technical charts are giving me
the indications for the test of 6000 marks. Premium fluctuation will be
troubling.
S&P 500 – It has some high at 2007. VIX is
running below those 2007 levels. When investors turn so fearless, I start
fearing. Definitely I am not trying to be over confident as there are genuine
sign for fall. It is now at 1492. It has extended above 1475 but may fail
before 1500.
Regards,
Praveen Kumar
