08 January 2014: Nifty Elliott wave analysis: Close below 50 DMA is a big hint for caution. Either it will quickly recovery from here or may end up in worse possible shape. NIFTY support – 6144 > 6129-6120.

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

For 08 January 2014: -

On 07 January 2014, FII Sold INR 567.02 crs and DII Bought INR 59.44 crs

We are just about to enter in earning season. Infosys will present its quarterly numbers on Friday. Nifty has closed below its crucial threshold support of 6170. Nifty has next logical support range at 6129 to 6120. Today is fifth day from 6359. Nifty is falling from past four trading sessions in a row.

I always said this that if Indian market starts underperforming then it turns alarming. This fall is also of same nature. We saw hammering in many blue chip stocks. This selling was already hinted due to major negative divergence in mid cap index.

I like to quote few important moving averages. 50 DMA is at 6194, 100 DMA is at 5994 and 200 DMA is at 5917. Ongoing fall may see a halt anywhere near to 6129 or may be before that. Even yesterday’s low of 6144 may act as support as we saw one impulsive rise from that point. Later, it got sold at high.

Above fact generates a pattern which suggests that if Nifty able to stand tall above 6200 then only we can thing about stability in trades. Do you know that Bank Nifty goes at its 200 DMA now and its 100 DMA is at 10600 levels?

Let us see if it can come. One must focus on mid cap stocks for trades as many stocks like SUZLON, SINTEX looks good.

Strategy for Nifty January future – We should get little positive opening. Most important threshold point for Nifty future will be at 6230 levels.  Global market mood may try to stop selling in India too. In the downside 6170 will act as threshold support. If it breaks threshold support of 6170 then you can expect 6140 in quicker time. Crossover of 6230 will invite short covering rise.

S&P 500 (USA) – I have said yesterday I feel for a bounce towards 1845-1850. We got 1840 so far. I still feel that it may extend near 1850. This is another typical pullback near top to retest top. It is like forming double top. For bull’s point of view, it may surpass 1850. Bulls are doing their job best at USA only. I say stay long as long as it holds 1832. ON higher side 1845-1850 is still under reach.

Regards,

Praveen Kumar