07 February 2014: Nifty Elliott wave analysis: My desired and anticipated gap up will come today. If Nifty can able to sustain above 6095 then we will expect more rise next week.

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

For 07 February 2014: -

On 06 February 2014, FII Bought INR 10.75 crs and DII Bought INR 610.80 crs

FIIs has bought small amount yesterday and so they are heavy seller near 6000 levels of Nifty. I was good to see nifty rebounding again from lower levels. It was almost hinting for more rises. This got sweeter as we are going to desired “bull’s gap up” today. It is going to form ‘cluster island formation’. This is still a possibility and it will depend on today’s closing levels.

If above happens then we may be away from short term bottom. Trigger point for bulls can be above 6095 and that is on closing basis. I am putting tough condition to buy from here so that I can be safer on trades. I have just one worry point in yesterday’s trade i.e. CNX small cap index was down by 0.36%. This kind of trades should not continue if rise has to sustain at higher levels.

I still conclude that Nifty long term chart is still in a range. This range can be bigger or small depending on time frame. We were at 6100 almost a year back and we are almost at same levels now also with few impulse for upside and downside some times. This makes trades even tougher. One has to pick right stocks from right sectors on each recovery or fall. Like it was buy on technology but sell on banking stocks in past few months.

Now as market is likely to move higher again then traders need to find newer set of stocks to trade. More than that I can say that trade on actively participating stocks. Technical support for Nifty will be at 6000 and 5960 only. On higher side, we may face resistance in the zone of 6075-6095 (already said yesterday).  

If I have to be worried then I am worried about banking stocks which are not giving signs of recovery yet. Bank NIFTY needs to move above 10350.

Strategy for Nifty February future – Nifty February future is very likely to see a gap up. It can be as big as 45-50 points. Once it open higher then we may not find it easier to trade. It is likely to open on resistance zone of 6095-6115. I want Nifty future to sustain above 6115 to bet for another round of buying. We already have long from lower levels to enjoy this gap up. I have already suggested buying this dip whenever it came near 6000 levels.

S&P 500 (USA) – It was good bounce and expected bounce to see where we capitalized to the full extent.  Moreover, it has closed above 1768. From here, I can deny all possibility of pullback as long as it is staying above 1768. Beauty of S&P is that it is now defining small stop losses for all trade. Earlier it gave stop loss below 1737 and now below 1768. I always say that never underestimate the bulls at USA. They set another example. Next challenging level can be 1788. Can it able to cross? For caution I can say that stay away from long if it breaks 1768 levels.

Regards,

Praveen Kumar