30 January 2014: Nifty Elliott wave analysis: If Nifty takes out 6085 in gap down then next key support will be at 6050 and 5972. Rebound is very likely to come. It can be stronger than expected rebound on expiry day.

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

For 30 January 2014: -

On 29 January 2014, FII Bought INR 250.48 crs and DII Sold INR 16.78 crs

Well, Fed taper 10 billion dollar more in its bond buying program. It was fully expected. In fact lesser than expected earning was hurting US market more than fed tapering. Tapering is reality and global market need to learn how to live without it. I am expecting over react kind of situation today as at one glance it is looking bad for emerging market like India.

Emerging markets like India and Hong Kong has perhaps seen selling for past four days in this aspect only so majority might have discounted. Well, we have derivative expiry today and that is making things more complex. People may be in rush to cover their forced long.  

Now, let us take big question. Can it bounce from low? My answer is very clear. Yes, it can. I am expecting 6085 to be taken out in gap down. Then we have two important levels to play. One is 6050 and then next is 5972. We will surely see good rebound from any of these two levels. Remember, Nifty is falling from 6355 only and it has not seen even single positive close since then. Today is fifth day.

If it react something like July-August 2013 kind of fall then technical analysis will have no answer. In that case NIFTY would be swinging below 5972. So, today and this end of this expiry will give lot of clarity to the traders.

Strategy for Nifty January future – One can expect opening at the lowest levels of January. It can open near 6050 levels. Anything above 6050 on opening will be considered as good opening. Why I am saying it good opening? Reason is that if it holds above 6050 in first few minutes then we have bright chance to see a rebound. If not then it can slide towards 6009 to 5972 levels. those who has short position can enjoy but I have long one. I may opt to average out long rather than stopping out.

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

S&P 500 (USA) – It again came near 1768 support zone. It has slipped over 18 points yesterday on lesser than expected earnings and fed taper. Fed reduces the bond buying program by further 10 billion dollar and limiting to 65 billion dollar. It may be a blow out kind of situation of emerging market but not looking so day for US market as long as S&P 500 holds 1768. If it breaks 1768 then we can say that it has formed a big topping pattern. I always focus on follow up. Let us see what is going to happen.

Regards,

Praveen Kumar