22 January 2014: Nifty Elliott wave analysis: Nifty need to fill up small gap down to remain on strong trajectory. It has trading support at 6265 and resistance at 6350-6360.

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

For 22 January 2014: -

On 21 January 2014, FII Sold INR 43.74 crs and DII Bought INR 181.50 crs

6350-6360 should be a possibility as long as Nifty is staying above 6265. Well, above that “W” formation is throwing the ‘indecisiveness ‘of market. Remember that nifty is near to 6300 from past more than a month but it has not given those sense of possible big rise.

This “W” formation may play its effect in the zone of 6130 to 6420 levels. This might be explanation that market has reverses in odd way on many trading days. This can continue. “W” pattern is known for its indecisiveness. Normally, traders should put the pen down from trades.  

For today’s trading, we are likely to see a small gap down. It is very important that it should fill the gap if it wants to move higher. If it fail to fill the gap then it can again correct towards 6240 and then near 50 DMA which is below 6200.

Technical charts are still saying that we may get support at 6265 but this has to be tested during trading hours only. Let us see. Market may remain direction for this week too.

Strategy for Nifty January future – Small gap down is expected after US market sell off from high last night. It was not expected by Indian market. Well. Nifty January future has trading support at 6300. We can expect fall only if it start spending time below 6300. So it is very important to see opening quotes. Although, threshold support is at 6280. It cannot be out of race for rise as long as it is above 6280.

S&P 500 (USA) – I said, “In my view, buy is permissible above 1854 or from near to 1820 with stop loss at 1807 or below.” Yesterday night it hit near to 1850 and then slipped. I can still say prefer to buy only above 1854 and be safe. If it is ending at 1850 then it can be just the multiple test of resistance. It is now almost a month near 1850 but it is not crossing. It is better to wait for the cross above 1854 to add fresh long if you are bull. Can it trap bulls near 1850? I cannot deny.      

Regards,

Praveen Kumar