29 January 2013: Nifty Elliott wave analysis: Randomness continues as long as it sustain above 20 EMA (now 6012). It can hit 6126 < 6150 only if it move above 6101. Break below 6050 will give 6012 to a free fall.

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

Today’s outlook: -

On 28 January 2013, FII bought INR 783.56 crs and DII sold INR 864.22 crs.

Cross of 6101 will give us 6126 and then may be even at 6150 levels. As long as 20 EMA saves, we cannot say for reversal of wave. I have already said that 20 EMA is moving faster. Yesterday it was at 6006 and now it is at 6012. Traders must be fed up for whole month in finding direction. I was expecting this to come nearer to 6100 marks yesterday but it hit a high at 6088 only.

One can look at the given chart. It is showing that volume is coming down with the rise in indices. Nifty has passed 19 trading sessions above 6000 marks but it is still not giving great sign for higher extension. Today it is going to be fifth trading session after hitting new 52 week’s high.

As I said yesterday and repeating from past many days that VIX is not comforting with rise. It has a low near 12.50 and now it is above 15. We have seen dip in mid cap and small indices too. All these are indicating for a top.

It was waiting for event and it is coming today as RBI monetary policy review. I have already expressed my views that we will get 25 bps repo rate at the maximum. Will the market cheer? This is something where I am giving a doubt to bulls too.

When I am giving a doubt to bulls then also I am unable to see anything bigger by a percent. Remember you cannot make speculation on cross over of 6101. If it crosses then also it will make a blow up top either at 6125 or at 6150. Well, truly I am not very confident and it is fair to assume that I already have some speculative short positions in the market. Definitely not on banking stocks yet !!!

By any chance if it breaks 6050 then we may get 6012 levels. Take a note that 6012 is 20 EMA. If it breaks 6012 then we may see a dip for free fall.

Strategy for Nifty January future: I have already said that 6111 is still a crucial level to watch. It hit a high at 6092 levels and turned soft. Technical charts are suggesting that failure of 6111 may result some odd reactions. If Nifty January future breaks 6060-6050 levels then it can slip again towards 6000 marks. You can expect impulsive movement after and before RBI monetary policy review. For February month’s contract you can expect a top coming very soon. Will it be a blow up top?

S&P 500 – I have already said yesterday, 1504, remains a challenge for S&P correction to begin. I am spotting – S&P 500 will make a top this week itself. Short – Short and Short.  

Till now, it missing 1504 and hit a low at 1496. Failure of 1504 should be one part of confirmation. I am feeling that break and close below 1490 will give good confirmation. Believe it or not but upcoming correction can shock even bears like me.

Regards,

Praveen Kumar

28 January 2013: Nifty Elliott wave analysis: 20 EMA has saved and we got a typical bounce. It is looking like to re test 6101. Cross over will result a move towards 6126. Technical trading support will be at 6042.

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

Today’s outlook: -

On 24 January 2013, FII bought INR 586.87 crs and DII sold INR 331.92 crs.

It was stronger push by banking stocks which has pulled the market higher on Friday. We have saved 20 EMA again in the dip. We have RBI monetary policy review tomorrow and we have derivative expiry for January month series this week. So this week is going to be vital and critical for market.

Market is trying to be stable above 6000 but we have seen under performance in mid cap and small cap index in last few days. It is looking like to deny ‘negative divergence of MACD’ for few more days. I am giving all importance to 20 EMA support. We can say that market is saving till now and may try to extent little more in this week of trades if RBI gives the expected rate cut.

I need to draw your attention towards rising VIX. It is now moving near 14 now after making a low near 12.50. It was also confirmed by selling stocks like HUL and Tatamotors. I still believe that we are near top but I am unable to say any particular level as top. Indications are coming that we may see some extension of rise this week.

I have quoted this earlier also that at these kinds of levels it will be only banking sector which will dominate.  We have RBI policy tomorrow and most banks are looking for gain. I am expecting 25 bps repo rate cut tomorrow which market is already pricing in. Nifty may try to make newer 52 weeks high in that process. Cross of 6101 will give us 6126 and then may be even at 6150 levels. As long as 20 EMA saves, we cannot say for reversal of wave.

Strategy for Nifty January future: I have spotted 6111 for January month but now it is looking to make a test towards 6111 levels. Cross over of 6111 will give a move towards 6130 and then 6160 also. We will have important trading support at 6050. You can expect first half range from 6050 to 6100+ (6111) for the first half. Remember it is important to save 6050. I cannot say anything for second half. Yes, we may see sharp and very sharp swings. Suppose if it start trading below 6050 (for 5 minutes) or failure above 6111 at higher levels will result weakness.

S&P 500 – 1504, remains a challenge for S&P 500 as of now. It is very surprising that VIX is lowest of 5 years. When everyone says buy as everything is fine then time comes for caution. Remember that most top forms in this kind of environment only. I am waiting for correction to begin. I am spotting – S&P 500 will make a top this week itself. Short – Short and Short.  

Regards,

Praveen Kumar