24 January 2014: Nifty Elliott wave analysis: Nifty is under flagship of “W” pattern and another gap coming. Technical support is in the zone of 6300-6290. It can rebound if it holds 6290 and it needs to rebound to save bulls.

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

For 24 January 2014: -

On 23 January 2014, FII Bought INR 433.60 crs and DII Sold INR 393.60 crs

First of all, we saw sell off in US market last night which was driven by Chinese data and earning analysis. It seems that US investors are deciding about fundamental valuation of stock after sharp one year rally. Of course, they may demand better performance. There is nothing like systemic failure. Correction is the part of the market.

Take a note that when US market goes for one month’s lowest close; Indian is on one month high. It is very rare to see. Some adjustment must come and so we may see gap down. Charting wise Nifty has yet to cross its decisive hurdle of 6360. The “W” pattern always makes market dicey. It has closed at highest point of the day and set to open lower. It is important to hold yesterday’s low of 6316. Although, Nifty can get technical support is only at 6300 to 6290 zone.

It can never be good idea to short the market after gap down. This kind of wild market behavior is the part of “W” pattern which is running right now. I still feel that Indian market can take a bounce towards 6360. Cross over of 6360 will give us a possible new all-time high again.

What is concerning is banks and what can rescue Indian market is also banks.

Strategy for Nifty January future – Gap down is very much expected right now but Indian market may open better than whatever SGX Nifty will give at 9 am. After gap down, we will have trading support at 6300-6280 levels. Note down very clearly that a GAP down must fill up to continue with uptrend otherwise it can be “Bear GAP down”. So, off load all long if it fail to recover after gap down.

S&P 500 (USA) – I said that wait for the cross of 1854 to go fresh long. Here, it saved you. We saw a test of 1850 few days back and it hit 1815 yesterday night. I am saying after every this kind of dip that do not underestimate the bulls at USA. They are strongest bull of the world. Call as of now is that as long as it holds 1815, the low of 13^th January 2014 you can again expect another attempt to 1850. US market goes at monthly low right now so one must avoid any long if it breaks 1815.       

Regards,

Praveen Kumar