03 January 2014: Nifty Elliott wave analysis: Nifty can try to find its way towards 6100 levels very soon. Now technical resistance will be at 6260 only. Sell every rise but not the gap down.

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

For 03 January 2014: -

On 02 January 2014, FII Bought INR 674.05 crs and DII Sold INR 189.75 crs

I gave enough hint of this fall from past many days. I put a level of 6320 and 6360 as levels to get sold from top. Nifty got sold just before 6360. In fact it was saved due to New Year vacation. Yesterday was very first day for global market to welcome 2014 and bears took the charge.

I always said this that 6300 levels on Nifty has a history to trap bulls. Is it doing this time too? I may get answer as ‘yes’. Have a look at the pattern. It slipped on very 8^th day after being choppy at 6300.

Earlier I said that 6320 and 6350 will be stiff to deal. Now resistance has shifted from 6320 to 6260. In the down side, market will try to find its way towards 6100. Dot technical support will be at 6120 and 6085 levels.

We are going to see a gap down of 50-60 points today. We will see big impact on rate sensitive stocks. Take a note that when Nifty slipped by 1.28% then at the same time small cap and mid cap indices slipped over 2.50%. This is alarming sign. One should not be brave to buy the low as low may not come in easier way. Read our intraday updates as I can try to find few good supports. If not, then many good shorts.

I gave Reliance short for readers for free.

Strategy for Nifty January future – So, 6420 has played its way. We were short from 6375-6380 levels and took profit only near 6260 -6250 levels, gaining over 120 points. It was ‘call of the month’. I am already short on 6400 call from 90+ levels which is now below 50. We will see today’s opening near 6200 levels. We can expect immediate support at 6160 levels only. I am not in hurry to cover short or even adding long. This fall may not stop easily.

S&P 500 (USA) – We got enough time to ad d short in fast few days of trades. Now it slipped from 1850 and closed at 1832 yesterday saying ‘welcome to 2014’. I expect more fall towards 1800 levels. Keep stop loss at 1854 and expect weak closing even for today. We are on top formation and hence every pullback should be sold with stop loss at 1854 levels. Let us see today’s low as it can give us good idea for the magnitude of fall.   

Regards,

Praveen Kumar