07 January 2014: Nifty Elliott wave analysis: Again 6170 is going to be crucial for the third day too. Mini bounce is expected but we will see selling at higher levels as long it stay below 6260.

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

For 07 January 2014: -

On 06 January 2014, FII Sold INR 318.91 crs and DII Sold INR 22.54 crs

It is same old expected move by FII that they are selling cash market near 6200 levels for the second day in a row. Put/Call ratio goes at 0.96. This is also showing that from 6200 to 6150 we should expect a bounce towards 6260 on Nifty. We got the low at 6170 for two consecutive days in a row.  

Meanwhile when Nifty closed in red we saw mid cap and small cap index closing green. This might be saying that appetite for bulls are still alive in this market. We saw bounce from 50 DMA on NIFTY in past also. Past four bounce Nifty came from 50 DMA only so why cannot be on fifth time.

I have hope for bounce but I cannot be extra brave looking banking index. Equally, market is going to focus on Infosys earning which will come on Friday. I am again quoting same analysis as of yesterday with strong support at 6170.

Technical charts are spotting for the support at 6120 and 6085 as it has broken 6260. Now, as long as Nifty is staying below 6260 we can address those as pull back only. Friday’s low of 6170 may act as crucial support for today in any weak trades. We have possibility of bounce from 6170.

Strategy for Nifty January future – SGX Nifty is showing for ta dull opening. Nifty January Future should get support at 6200 again for one bounce. It is equally true that it may see fall again after a mini bounce. I cannot rule out the possibility for the test of 6100-6050 levels in coming days. I do not think that one can short any gap down in this market. In all, 6200 is decisive for the day and hope of recovery. Let us see if it comes. Equally, trade above 6252 will generate a pace for rise. I am considering 6200 as good base to try long as we are very near to support with good risk/reward ratio.

S&P 500 (USA) – I still feel that bounce towards 1845-1850 I possible as again from nearer to 1820 levels. We cannot see bear’s edge immediately as US market has a big backup of bulls from past year. Keep a stop loss just below 1820 and opt to trade long side in any dip. A negative close is discouraging me but I feel that opting long on positive session will be good idea.

Regards,

Praveen Kumar