10 February 2014: Nifty Elliott wave analysis: Looks like 6075 to 6095 resistance will be taken out by gap up. It is a good formation and giving to buy pullback for move towards 6200 levels by this week.

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

For 10 February 2014: -

On 07 February 2014, FII Bought INR 267.26 crs and DII Bought INR 627.42 crs

The good part and best part of Friday’s trading session was that it has again close with good attempt of recovery after intraday dip. It is giving opportunity to both. Bears could cut their short at low and bulls could add long at low.

Now US job data was also a joy for market. It was not a very good set of numbers but equally it was not a disaster. Market moved higher it was already oversold. Payrolls rose less than projected in January and the jobless rate unexpectedly dropped to the lowest level in more than five years, clouding the outlook for the U.S. economy and Federal Reserve.

Indian market should be little easy in finding trend now. Above factor can give us an opening which should be moderately higher. Higher opening has lots of good meaning if it is coming to overcome resistance. I have already quoted that 6075 to 6095 would be a still zone of resistance. It was confirmed on Friday’s session when we hit a high at 6080 and then dropped.

If gap up able to surpass the resistance zone at 6075 to 6095 then we may be close to form a ‘cluster island reversal’ pattern which will be good signal for bulls. Nifty may likely to come near 6200 by this week itself. We have second scenario too. If this tries to fills the gap then also there cannot be anything to worry as long as it holds Friday’s low of 6036 levels.

I must add, “If BANK NIFTY opens in the zone of 10350 to 10400 then do not immediately jump to assume that resistance has crossed. Wait for pullback to conclude if this gap up really has strength or now. I am still skeptical about banks in recovery’.

Strategy for Nifty February future – I said on Friday also that I want Nifty future to sustain above 6115 to bet for another round of buying. It hit a high at 6099 and took a dip. Closing was encouraging for me. Now it is takes an opening above 6100 (as hinted by SGX NIFTY) then also I like to wait for crossover of 6115 else I may opt to wait for an intraday pullback. Above 6115 we may see the beginning of good three days of rally which can give us 6200 to 6225 levels. Well, it will be good if market moves higher without filling today’s gap. Monday has lot of answer today.

S&P 500 (USA) – What a great way by bulls!!! Full 60 points jump from the low of 1737 and that’s in just 3 days. It came at highest point of past 11 trading session. Now we have reasons to expect a pause or some reaction at 1809 which is 50 DMA resistances. I can again insist to trade long on crossover of 1809 marks. So, how was the idea ‘not to under estimate bulls at USA’? I can add a word of ‘caution’ near 50 DMA. If reaction has to come then it can come in this zone. Fibonacci time frame suggests me a dead day today.

Regards,

Praveen Kumar