28 January 2014: Nifty Elliott wave analysis: All eyes are on RBI policy now. Key supports for NIFTY are – 6085 > 6050 and then finally at 5950. Optimistic support for the day is at 6085. We may opt to buy low today.

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

For 28 January 2014: -

On 27 January 2014, FII Sold INR 1334.21 crs and DII Bought INR 151.02 crs

So, Nifty hit exact low at 6130 and closed almost at day’s low. This kind of support works only if we would see bounce from those. If not then indices are likely to move towards next support. This support can be at 6185 levels. one need to note that 50 DMA was at 6218 which was taken out in gap down.

Now 100 DMA is at 6106 and 200 DMA is at 5960. Where will this fall stop when charts are saying that it may just be the beginning? RSI was on negative divergence since November 2013 itself. I feel that after few intermediate bounces, Nifty will finally come close to 200 DMA or at 5950. This is going to be key support.

Now all eyes are on RBI’s upcoming monetary policy review. I expecting that he will keep all rates unchanged. As he did not hiked rate in December month policy so he has no big reason to think about hiking right now when WPI and CPI was lower. Now, can he give rate cut? It is not easy either as Indian Rupee is showing fresh sign of weakness and he has to do something immediately.

For today’s session, watch out for support in the zone of 6085 to 6050. In fact, I would be happy to see it coming at 6050. It should come near to 6050 but it should not break. In that case we may have a point for some technical rebound. These technical figures are not going to change even after RBI’s monetary policy outcome. Take a note that now we are no more under effect of “W” pattern.

We have RBI policy now, then we have fed meeting and then derivative expiry. A lot to happen in market now but trading opportunity if not going to be easy in this mess. I had already quoted earlier than below 10800 BANKNIFTY can see a crash. So, now it is looking for 10400 or much lower.

Strategy for Nifty January future – It may be another gap down of nearly 50 points more as it is missing current support of 6150.It has already corrected a lot so I will prefer to buy either at the support of 6085 or at 6050. RBI may not be a spoilsport. It is still not easy to predict. It will be safer to take call after RBI policy only.

Shall I buy low or shall I sell the pullback? Please visit my ‘intraday updates’.

S&P 500 (USA) – It was quoted for support at 1768. Yesterday night at one point it was hitting 1772 and then rebounded strongly up to 1794. Finally, it closed at 1782 which is below 1784. I can say that it is not a bad rebound. It has raised hope for today. As long as it holds 1768 without breaking it can rebound like this. I can still warn that for the first time after many months bulls are losing charm. Now chances are very less for any new life time high. Sooner or later S&P 500 will go lower towards 1650-1600 levels in medium term. Do not worry immediately. We will get a bounce.

Regards,

Praveen Kumar