13 January 2014: Nifty Elliott wave analysis: Poor IIP and hope of rates holds may give good start but follow up will come in favour of bears only. Last hope for NIFTY 6145-6140.

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

For 13 January 2014: -

On 10 January 2014, FII Bought INR 68.16 crs and DII Bought INR 81.73 crs

We saw full 100 points swing on Friday’s session but it give up almost 70 points from its intraday high in post 2 pm trades. We got November month IIP data after-market hours. It came at (-) 2.10%. This is too bad figures and hence giving a hope that RBI will at least hold key rates in upcoming RBI policy. Now market is likely to wait for WPI data which will come this week.

On other hand Infosys gave better-than-expected earnings figures. I can sense that developments are not as bad as technical set up. It has closed near bottom or well off the low for fives in a row. I can expect some gap up today on the optimism on bank rate due to poor IIP.

Will that gap up hold? Rend suggests that it can give up easily. One has to accept that now Nifty is sustaining below 50 DMA. This is now turning cause of concern to me. I still below that 6145-6140 is a good trading support to deal.

Let us see what is going to happen to happen today. One thing is for sure that if it breaks 6145-6140 then we will see panic sell off. BANK NIFTY is also on very critical support. If it breaks and sustain below 10800 then we may be close to a massive sell off.

Strategy for Nifty January future – As SGX Nifty is indicating, it can take some higher start. Problem will begin once it fill up the gap which can happen anytime. Although I believe that start may not be as good as SGX Nifty is quoting right now which is at 6215. Remember that Nifty is giving up its premium to a big extend in the mid of the series. Friday’s low of 6156 will play decisive role. If it breaks 6156 then expect all round heavy panic sell off which can ignore all good news and results.   

S&P 500 (USA) – US market can see pullback from any intraday dip as bulls are buying every dip. I can still say that as long as 1824 holds, it will go higher. There is no need to change the analysis as it is most clear market for bulls. We can expect the litmus test with the beginning of this week. It is going to be decisive if it can able to breaks 1850-1854 on higher side.   

Regards,

Praveen Kumar